xdlx
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APA Huge "step" For The Profession.

Thu Aug 16, 2012 10:55 am

It is about time the BK courts recognized the "sweat equity" that labor "invests" in LEGACY companies like AA.

Management should not continue to utilize the process to destroy livelyhoods in the name of being "competitive"
Finally a Judge with something between the legs.


A rare Chapter 11 victory for labor
posted on August 15, 2012 17:06

Fellow Pilots,

As you know, United States Bankruptcy Judge Sean Lane issued a ruling late this afternoon denying AMR management’s motion to reject the Allied Pilots Association-American Airlines Collective Bargaining Agreement, marking a rare Chapter 11 victory for labor.

In his ruling, Judge Lane cited management’s stated intention of furloughing 450 pilots and the sweeping scope changes they proposed as areas where they did not make a sufficiently compelling case.

For many months now, we’ve emphasized that AMR management has overreached in their desire to extract more concessions than are warranted to support their reorganization plan in this bankruptcy. The bankruptcy process is designed to level the playing field with the competition ― not to bury us underneath it. Clearly management went well beyond what is the industry standard for bankruptcy contracts, and the judge recognized this in his decision today.

A large number of APA volunteers and advisers share credit for this favorable turn of events, including the lawyers at APA General Counsel’s office (including Kathy Krieger, Darin Dalmat, Danny Rosenthal, David Dean and Edgar James), APA’s in-house legal team (including Chuck Hairston), Fil Agusti and Joshua Taylor at Steptoe & Johnson, and Andrew Yearley and Ben Tisdell of Lazard. We would also like to thank the following individuals for their help drafting testimony and then testifying as APA’s principal witnesses in the case: Mr. Yearley, Negotiating Committee Chairman FO Neil Roghair, FO Jim Eaton (APA’s representative on the Unsecured Creditors’ Committee), APA Director of Industry Analysis Allison Clark and Technical Analysis and Scheduling Committee Chairman FO Larry Rosselot. Captain Mickey Mellerski, Captain Dave Brown, Captain Bill Boyd, FO Greg Shayman (who was instrumental in drafting APA’s declarations and analyzing management’s declarations), Scope Committee Chairman FO Tim Hamel, FO Tim Daudelin, FO Per Lovfald, FO Dave Durham, and Government Affairs Committee Chairman Captain Bob Coffman also deserve credit for volunteering to help the attorneys work through many of the difficult issues in the case. To these individuals and many others who have worked tirelessly on our behalf during the past several months, well done.

In voting down the tentative agreement, our membership asked the toughest question a labor union could ask in Chapter 11 restructuring: “what is behind that ‘1113 door?’” We now have a near-term answer—a significant setback for management, another set of 1113 court hearings and another round of bargaining.

The elation I feel today is tempered somewhat by my abiding frustration with AMR management for the many misjudgments they have made to deliver us to this juncture. AMR’s Chapter 11 filing was precipitated by AMR management’s actions—and all too often, their inaction—not by a collective bargaining agreement our pilots negotiated in good faith.

Does any right-minded person believe that erasing 60 years’ worth of bargaining history would result in a brighter future for American Airlines? Does anyone think that securing permission from a bankruptcy judge to reject our pilots’ contract constitutes effective employee relations? The answer is, once again, a resounding “no” aimed squarely at AMR management.

Your APA leadership is committed to securing a consensual, industry-standard contract that respects your sacrifices and recognizes your true worth as professionals. If AMR management one day secures the ability to impose arbitrary terms and conditions, they too will have to live with the consequences of their actions. One of those consequences will be to reinforce for all the fact that AMR’s bankruptcy isn’t just financial. Instead, what we’re seeing is a management devoid of constructive solutions to our airline’s problems, which should alarm everyone with a stake in the outcome of American Airlines’ restructuring.

As for how you can help to ensure the necessary course change, maintain professionalism at all times and do not let emotion influence your decisions. Management may be eager to engage in “hostage-taking”—don’t oblige them.

Please note that your APA leadership has dedicated additional resources to ongoing Strike Preparedness Committee operations, beginning with the resumption of Phone Watch.
If you have a question or concern, contact Phone Watch between 8 a.m. and 4 p.m. Central Daylight Time at tel. 817-302-2395. Also, we will be scheduling a new round of Family Awareness meetings across the system. Be on the lookout for meeting announcements and make plans to attend a Family Awareness meeting in your area.

Once again, with your decisive vote against the tentative agreement, you had the courage to ask, “What happens next?” I’m likewise certain that you have the necessary fortitude for the fight that’s certain to come.

So, while management has been denied the opportunity for now to shred our Green Book, I submit that the answer to that question is straightforward: what must happen next is appropriate recognition of our profession and our vital role in the airline’s operation.

In unity,

Keith Wilson
APA President
 
KDAYflyer
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 12:13 pm

Unions and bad management destroy more companies than anything else. Just because one pro-union judge sides with you doesn't a court case make. There will be appeals. Historically these agreements have proven to be a death knell for any airline that is unionized. Thats why once they are gone the airline can survive and people keep their jobs-depsite the union, not because of it.
 
deltal1011man
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 1:30 pm

Quoting xdlx (Thread starter):

Yeah Baby!

Congrats to the APA, Its members and Airline employees world wide. (I bet the TWU feels stupid....just sayin)
New airliners.net web site sucks.
 
william
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 1:36 pm

Uh........the Judge gave AA 90% of what they asked for..............but good spin though. I wish the best for AA employees.
 
aluminumtubing
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 1:38 pm

As a APA member, I don't view this as any major success. It's more a technicality. The abrogation was denied on only two points and without prejudice. AA has already said it will amend the 1113 and refile tomorrow. In my humble opinion this is only a minor speed bump for AA. There is so much misinformation out there it's ridiculous. I still say AA will prevail, only a week or so later than they hoped. It is still the beginning of the end, all chest thumbing aside.
 
MaverickM11
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 1:47 pm

Quoting xdlx (Thread starter):
The elation I feel today is tempered somewhat by

...economic reality, as the invisible hand is bound to slap us later, especially if we merge with US.  
E pur si muove -Galileo
 
kl911
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 1:51 pm

Unions should really be banned in Chapter 11 discussions. Unions are most often the reason of the Chapter 11 situation itself anyway.
 
aluminumtubing
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:09 pm

Quoting kl911 (Reply 6):
Unions should really be banned in Chapter 11 discussions. Unions are most often the reason of the Chapter 11 situation itself anyway.

Wow, a very simplistic view at best.....
 
DashTrash
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:22 pm

Quoting kl911 (Reply 6):
Unions should really be banned in Chapter 11 discussions. Unions are most often the reason of the Chapter 11 situation itself anyway.

That's complete horseshit. I can't think of one CH. 11 that wasn't caused by management either making bad decisions or not adopting to changes within the industry.

Quoting aluminumtubing (Reply 4):

I'm afraid you're right. You will not have the right to strike as a result of an abrogation, but what happens after exiting BK might open some doors. Unintended consequences for management maybe?
 
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Polot
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:29 pm

Quoting aluminumtubing (Reply 7):
Wow, a very simplistic view at best.....

Very true, but on the other hand blaming it entirely on bad management is also a very simplistic view at best.

Quoting DashTrash (Reply 8):
That's complete horseshit. I can't think of one CH. 11 that wasn't caused by management either making bad decisions or not adopting to changes within the industry.

But sometimes they cannot adapt due to roadblocks put up by labor 

I'm not blaming labor for the airlines problems, but a successful airline forms from management and labor working together and making sacrifices. Alternatively an airline's failure lies on the back of both management and labor.
 
aluminumtubing
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:35 pm

Quoting Polot (Reply 9):
Very true, but on the other hand blaming it entirely on bad management is also a very simplistic view at best.

Very true. Nothing is all one sides fault. A marriage succeeds or fails based on the efforts of both participants. Same for a corporation. And with almost 30 years as an AA employee, I have never put the blame entirely on management.
 
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lightsaber
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:37 pm

APA has gotten their monies worth out of their lawyers.

Quoting Polot (Reply 9):
a successful airline forms from management and labor working together and making sacrifices. Alternatively an airline's failure lies on the back of both management and labor.

  

I hope AA is able to reorganize. a.net needs a popcorn smilie. These APA vs. AMR court fights will be facinating!

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
LAXdude1023
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:46 pm

Quoting aluminumtubing (Reply 10):
Very true. Nothing is all one sides fault. A marriage succeeds or fails based on the efforts of both participants. Same for a corporation. And with almost 30 years as an AA employee, I have never put the blame entirely on management.

Welcome to my respected users list. Its refreshing to hear a view point from the pilots that isnt filled with anti-management hatred or that is not completely unrealistic expectations in todays industry.

I really do hope that you guys can come to some sort of agreement that will be more competitive in cost but also not take all labor to the cleaners.
It is what it is...
 
aluminumtubing
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 2:54 pm

Quoting LAXdude1023 (Reply 12):
Welcome to my respected users list. Its refreshing to hear a view point from the pilots that isnt filled with anti-management hatred or that is not completely unrealistic expectations in todays industry.

Thanks. It's not easy being rational in an irrational world.  
 
xdlx
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:04 pm

One thing is for sure..... This management team at AA will need to start showing some due diligence.
New airplanes alone will not make it work.
 
KDAYflyer
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:13 pm

Quoting xdlx (Reply 14):
One thing is for sure..... This management team at AA will need to start showing some due diligence.
New airplanes alone will not make it work.

Indeed. Labor COOPERATION and no union stonewalling with responsible management action will be the two keys to success.
 
aluminumtubing
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:19 pm

Quoting KDAYflyer (Reply 15):
Indeed. Labor COOPERATION and no union stonewalling with responsible management action will be the two keys to success.

Absolutely correct with that statement. However in today's environment, I would have to say we are ) 0 for 2!
 
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Acey559
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:25 pm

Quoting aluminumtubing (Reply 10):

We're all pulling for you folks here at Eagle. I don't want to be stuck at a regional my whole life and even if it means a tougher road for the regionals in the short term, ultimately what you're doing over there (and the other majors) will hopefully help the industry in the long term. We wish you all the best and hope that you ultimately get what you want and deserve as professionals.Good luck!
 
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seabosdca
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:26 pm

Quoting kl911 (Reply 6):
Unions are most often the reason of the Chapter 11 situation itself anyway.

Don't forget that every single CBA was approved by management. If it approved an unworkable CBA, management shares the blame.

People often talk as though unions can just impose terms on the company. It's called collective bargaining for a reason. Management always has a nuclear option that's even more powerful than the union's ability to strike: shut down the company and sell the assets to a new one.

[Edited 2012-08-16 08:26:54]
 
phxa340
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:33 pm

If someone with AA insight can fill me in ... but what I read is that the Judge actually threw out just a few parts of the contract AA wanted but pretty much kept mostly everything else they asked for. It seems AA has to modify a few aspects of the contract to then have the judge approve it ? Am I oversimplfying ... I am just trying to get a balanced viewpoint. Not really seeing how this is a massive win for the unions but more a small victory.
 
ckfred
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 3:43 pm

The APA crowing about winning sounds like someone crowing about a football team forcing a 3 and out late in the game, when they are down 42-7. Yes, you stopped the offense and got the ball back. But you can't score 35 points in 4 minutes.

The judge has told AMR's lawyers what they need to do, in order to get the relief they are seeking, so he will grant the relief with an amended motion.

What the judge did was give the APA a last-minute opportunity to either get a few tweaks to the last tentative agreement, or to simply ask for a chance to revote and put the thumbscrews to the rank and file.

The key is the fact that AMR offered the pilots 13.5% of the stock that will be issued upon exit from Chapter 11. I don't know what ownership interests that TWU workers have, or what is in the proposal that the APFA is voting. But, if APA wants to boot Horton in the future and try to work a deal with US, it only needs 36.6 of the new shares to gain control of the board.

That's a realistic number, in terms of trying to get control of a company. If the TWU has 13.5%, and APFA has 13.5%, that's 40.5% of the stock. Now, you only need on large shareholder to agree with the unions as to terminatiing Horton and his team and/or merger with US.

I've known a lot of people who took lousy deals because of generous stock provisions. They either made insane amounts of money later on the sale of stock, or they were able to influence a company because of stock ownership. Even though the T/A may have been lousy, the ownership provision made it worthwhile.
 
deltal1011man
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 8:12 pm

Quoting KDAYflyer (Reply 15):

The issue it Horton already has a huge bonus check waiting for him once AA leaves this joke of a BK. Him taking that bonus is only going to hurt the already terrible relationship.

Till AMR's board brings in someone who is willing to, at least, have some common sense when dealing with labor(ie not taking large cuts from labor only to take a bonus(stock/cash/or a cookie)) they are going to keep having the mess they have. A smart CEO would have done just what Delta's CEO did during BK.....every time the employees get a cut, he took a cut. (and IIRc same % as the employees.) Hell he was still making over 300K a year but the employees loved him. It is probably a big factor in keeping unions away during BK also. Did it really have any effect on him? no he is set for life. He isn't just a complete idiot (or a$$ hole)

Also he took his retirement and donated it to the Delta Employee Care fund.

Both sides have problems for sure, but the last to CEO's at AMR has made some really bad mistakes. Both have(or will take) large bonus right after employees lost there shorts. (and then can't figure out why they are hated)
New airliners.net web site sucks.
 
flyfree727
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 9:06 pm

Quoting ckfred (Reply 20):
I don't know what ownership interests that TWU workers have, or what is in the proposal that the APFA is voting.



APFA equity stake is 3%

AA ORD
 
TWA85
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 9:59 pm

Quoting Polot (Reply 9):
I'm not blaming labor for the airlines problems, but a successful airline forms from management and labor working together and making sacrifices. Alternatively an airline's failure lies on the back of both management and labor.

Bingo!!!!!! In order to straighten this mess out, both the AA management and the unions need to work together. Abrogating the contracts and/or running to Doug Parker wont fix either parties problems. The reason DL has beome so sucessful is that the management and the unions have begun to build a very stong relationship, to the point that both parties practically get what each other asks for during negotiations. The bankruptcy judge did not deny AA's 1113c motion request because he is siding with the APA, he denied the request out of fear of the consequences for BOTH parties if he approves the request.
 
Alias1024
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 10:13 pm

Quoting TWA85 (Reply 23):
The bankruptcy judge did not deny AA's 1113c motion request because he is siding with the APA, he denied the request out of fear of the consequences for BOTH parties if he approves the request.

I do wonder if this isn't part of why the motion was denied but left with only a couple items to be changed. The judge may be hoping the two sides can come to a new agreement so that he doesn't end up approving the 1113c and AAs operation going straight down the drain.
It is a mistake to think you can solve any major problems with just potatoes.
 
NWAESC
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 10:20 pm

Quoting phxa340 (Reply 19):
If someone with AA insight can fill me in ... but what I read is that the Judge actually threw out just a few parts of the contract AA wanted but pretty much kept mostly everything else they asked for. It seems AA has to modify a few aspects of the contract to then have the judge approve it ? Am I oversimplfying ... I am just trying to get a balanced viewpoint. Not really seeing how this is a massive win for the unions but more a small victory.

In the 1113 process, and judge has to make the decision to allow a debtor's motion to reject the entire CBA, or not. They cannot just pick parts to keep and parts to toss. In this case, he denied AMR's request to toss the entire agreement based on what he felt was an overreach (my term) by the company regarding a couple of sections.
"Nothing ever happens here, " I said. "I just wait."
 
flflyguy
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 10:30 pm

Quoting Alias1024 (Reply 24):
The judge may be hoping the two sides can come to a new agreement so that he doesn't end up approving the 1113c and AAs operation going straight down the drain.
Quoting NWAESC (Reply 25):
In this case, he denied AMR's request to toss the entire agreement based on what he felt was an overreach (my term) by the company regarding a couple of sections.

And if I know AA, and I do, I would be very surprised if the company shows any interest in negotiating/LBFO/TA now. They know the things they have to fix in the 1113...they'll fix them...quickly...refile... and then impose.

I would imagine that AA management/HR is partying right now. I am afraid that the pilots have shot themselves in the foot. And I fear that we (APFA) are about to do the same.

Wish us luck......
The views expressed are my own, and not necessarily those of my employer.
 
NWAESC
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 10:41 pm

Quoting Alias1024 (Reply 24):
The judge may be hoping the two sides can come to a new agreement so that he doesn't end up approving the 1113c and AAs operation going straight down the drain.

That's my guess as well. I know in our (NW) case, the judge wanted to exhaust every last option for an agreement before making a ruling.

Quoting FLFlyGuy (Reply 26):
And if I know AA, and I do, I would be very surprised if the company shows any interest in negotiating/LBFO/TA now. They know the things they have to fix in the 1113...they'll fix them...quickly...refile... and then impose.

I've no doubt AA's lawyers are pulling some all nighters to do just that.
"Nothing ever happens here, " I said. "I just wait."
 
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mayor
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RE: APA Huge "step" For The Profession.

Thu Aug 16, 2012 10:58 pm

Quoting DeltaL1011man (Reply 21):
Did it really have any effect on him? no he is set for life.

True.......I'm sure Grinstein was set for life BEFORE he became DL's CEO.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
PRAirbus
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 1:34 am

AA is heading to a make it or break it phase. This neverending war between management and labor brings memories of airlines already long gone. The pilots SHOULD NOT be celebrating, the judge found no objections to 98% of the changes AA proposed so most likely, he will impose 1113. 1113 will prevail over the pilots' ego.
 
ual777
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 3:00 am

What AMR management wants is rediculously draconian. They are fully trying to destroy the AA pilot group and are asking for scope relief that NO OTHER airline has. It's disgusting, and Horton Is scum.
It is always darkest before the sun comes up.
 
Max Q
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 3:21 am

Quoting DashTrash (Reply 8):

That's complete horseshit. I can't think of one CH. 11 that wasn't caused by management either making bad decisions or not adopting to changes within the industry.

Very well said and good for the APA.
The best contribution to safety is a competent Pilot.
 
sbworcs
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 5:34 am

Quoting Max Q (Reply 31):
Quoting DashTrash (Reply 8):

That's complete horseshit. I can't think of one CH. 11 that wasn't caused by management either making bad decisions or not adopting to changes within the industry.

Very well said and good for the APA.

Well in that case if everything bad is managements fault then everything good is too and no-one else should have any claim to success.
The best way forwards is upwards!
 
Max Q
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 5:53 am

Quoting sbworcs (Reply 32):

Well in that case if everything bad is managements fault then everything good is too and no-one else should have any claim to success.

That's mostly pretty true.


Management is in charge (hence the name) they must bear the brunt of the blame when they mismanage because they are in charge. On the other side they do deserve credit when the company does well.


They don't do it without the employees help but they are the ones steering the ship..
The best contribution to safety is a competent Pilot.
 
crAAzy
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 6:06 am

Quoting flyfree727 (Reply 22):
The bankruptcy judge did not deny AA's 1113c motion request because he is siding with the APA, he denied the request out of fear of the consequences for BOTH parties if he approves the request.

Don't be ridiculous.

The writing is on the wall and the pilot group has spoken loud and clear with this last vote - they have no faith in management. Anyone that think the pilots will approve a deal under BK with the current management team is niave and the judge knows it too. There were specific points he didn't agree with in the 1113c motion and AA has already indicated they will be address by Friday and ask for another ruling where he will approve the filing. There no other reason for him to have been so specific in his rejection.

Quoting PRAirbus (Reply 29):
AA is heading to a make it or break it phase. This neverending war between management and labor brings memories of airlines already long gone. The pilots SHOULD NOT be celebrating, the judge found no objections to 98% of the changes AA proposed so most likely, he will impose 1113. 1113 will prevail over the pilots' ego.

  

Although I'm not sure it's as much ego as it is desperation/frustration in a proud company that has continued to fall apart over the last 9 years.

In the end, this letter is nothing more than APA leadership trying to rally the troops before what will be a devestating blow to the entire pilot group. There will be no winners from this and the ramifications will be long lasting - even with a US/AA merger.
 
norcal
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 1:54 pm

Quoting aluminumtubing (Reply 4):

The problem with the whole 1113C process is that management gets as many "do-overs" as they want. If they got a one shot chance at getting the contract thrown out I bet we would have seen something much closer to Delta (i.e. industry average) then this draconian term sheet they are trying to force down. I also think the TA would have been more realistic and probably would have passed as well.

Oh well it looks like the race to the bottom continues. Anyone that thinks this will somehow give AMR a leg up in the industry for any extended period of time simply hasn't paid attention to airline history. Raping labor doesn't work in the long term and every time you rape labor and take bonuses you further destroy what little faith/relationship you have with them.

Some like to say this is labor and managment's fault, well I'd simply like to point out 2003. All AMR employees voluntarily took huge cuts to save the company. Management destroyed that good will when they took bonuses, therefore the current poor labor/management relationship at AMR is 100% on them. There is no trust and that won't change till management decides to change their actions.

Would everything be rainbows and unicorns if management hadn't taken bonuses in 2003? Probably not, but it wouldn't be so hostile and there's a good chance that chapter 11 might have been avoided all together.

2003 should have been an opportunity to try and build a Bethune/Continental, Southwest, or JetBlue type employee/management relationship. Instead that was thrown away by a couple of incredibly greedy senior execs and it seems like nothing has changed with Horton and Co.
 
DashTrash
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 2:10 pm

Quoting PRAirbus (Reply 29):
The pilots SHOULD NOT be celebrating, the judge found no objections to 98% of the changes AA proposed so most likely, he will impose 1113. 1113 will prevail over the pilots' ego.

I disagree. The rejected TA was a piece of crap that sold another 400+ pilots down the river, created a B scale, and gave up more narrow body flying. Letting the company file the 1113c was a better bet as that will expire at the end of the bankruptcy. The two sides will have to go back to the table and negotiate something. Ego had nothing to do with it.

Quoting sbworcs (Reply 32):
Well in that case if everything bad is managements fault then everything good is too and no-one else should have any claim to success.
Quoting Max Q (Reply 33):
That's mostly pretty true.


Management is in charge (hence the name) they must bear the brunt of the blame when they mismanage because they are in charge. On the other side they do deserve credit when the company does well.


They don't do it without the employees help but they are the ones steering the ship..

I completely agree with this. When you're a passenger, you want the sharpest tool in the shed driving your airplane. When you're driving the airplanes, you want the sharpest tool in the shed driving the company. That SHOULD mean the company continues to grow, hiring and upgrade opportunities are frequent and stockholders are happy.
 
flyby519
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 3:09 pm

The problem isnt management or unions, it is the US Bankruptcy code and the Railway Labor Act.

If an airline goes bankrupt then it should go out of business. Period.

You'll see both management and unions whistling a different tune if liquidation(at the major airline level) was even a remote possibility in this industry.

Bankruptcy is being used as a way for bloated airlines to slash vendor contracts, and labor agreements when the going gets tough instead of simply eliminating uneconomic capacity in the industry.
These postings or comments are not a company-sponsored source of communication.
 
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mayor
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 3:42 pm

Quoting flyby519 (Reply 37):

If an airline goes bankrupt then it should go out of business. Period.

So, 60-70K people should be out of work, just because management made some mistakes? If those employees (union or not) work their tails off and do the best they can, they should be punished?


BTW, using your policy, there would only be about 6 airlines left in this country, none of them the legacies.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
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seabosdca
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 3:51 pm

Quoting flyby519 (Reply 37):
If an airline goes bankrupt then it should go out of business. Period.

That was how business worked in the 18th century. It didn't work, because it created huge incentives not to engage in economic activity at all. Fixing that problem is how the bankruptcy system arose in the first place.

There are cogent arguments that Chapter 11 is too easy to access, but having no bankruptcy system is a recipe for economic disaster.

[Edited 2012-08-17 08:52:05]
 
TWA85
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 4:23 pm

Quoting crAAzy (Reply 34):
Don't be ridiculous.

Not being ridiculous. Just stating an obvious fact. The judge scolded the unions by acknowledging that there needs to be drastic changes to AA's labor contracts in order for AA to become more competitive, just not as drastic as AA was originally proposing.


This articale demonstrates how the UCC is starting to become just as impatient with the unions as they are with the management, by urging the unions to come to a consentual labor agreement with the company and ackowledging that AA can not afford to offer much more than it already has. The UCC does not appear to be as wrapped around the unions as once thought.
 
SPREE34
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 4:44 pm

Quoting flyby519 (Reply 37):
If an airline goes bankrupt then it should go out of business. Period.

Absolutely! That this isn't the case, is partly why the industry is where it is today.

Quoting mayor (Reply 38):
So, 60-70K people should be out of work, just because management made some mistakes? If those employees (union or not) work their tails off and do the best they can, they should be punished?


BTW, using your policy, there would only be about 6 airlines left in this country, none of them the legacies.

They move on to other jobs in a healthier industry, or change careers. It's done every day. Been there.

As for "6 airlines left", there would be more than 6 IMHO, and the would all be healthier because the market place wouldn't have sick and failing carriers propped up by BK or government bailouts. If US Air had been left to die 9 years ago, the pilots would all have more contract leverage (all employees for that matter) with companies making more money.
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mayor
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 5:03 pm

Quoting SPREE34 (Reply 41):

They move on to other jobs in a healthier industry, or change careers. It's done every day. Been there.

How many people are unemployed in the U.S., right now because there isn't a "healthier industry" for them to go to or they are unable to "change careers"?  
Quoting SPREE34 (Reply 41):

As for "6 airlines left", there would be more than 6 IMHO, and the would all be healthier because the market place wouldn't have sick and failing carriers propped up by BK or government bailouts. If US Air had been left to die 9 years ago, the pilots would all have more contract leverage (all employees for that matter) with companies making more money.

WHO, besides WN was making money in this industry, 9 years ago? Very unlikely that the other carriers (or even WN) could have absorbed those people.

As for all being "healthier", except for AA's current BK, it seems like the legacies are healthier, now, than they have been in quite awhile. It seems like the people that always say they should just be left to fail are either ones with an axe to grind about the airlines or have their favorite carrier that might survive.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
flyby519
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 5:03 pm

Quoting seabosdca (Reply 39):
That was how business worked in the 18th century. It didn't work, because it created huge incentives not to engage in economic activity at all. Fixing that problem is how the bankruptcy system arose in the first place.

Yea, and now instead of having those 18th century workers in cotton fields or factories, they are working for companies like Apple and Google in industries where innovation is leading the business forward.

Im not saying the entire airline industry should wither and die, but there is too much overlap. Low barriers to entry and high barriers to exit. Airline investors throw good money after bad in hopes of ...? The airline business model needs to develop into one that is sustainable without a rotating bankruptcy cycle.

[Edited 2012-08-17 10:05:02]
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Polot
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 5:26 pm

Quoting SPREE34 (Reply 41):
As for "6 airlines left", there would be more than 6 IMHO, and the would all be healthier because the market place wouldn't have sick and failing carriers propped up by BK or government bailouts. If US Air had been left to die 9 years ago, the pilots would all have more contract leverage (all employees for that matter) with companies making more money.

While the companies would be healthier do to less competition, it is a stretch to say that employees would have more contract leverage. Due to those failed carriers the industry would have hundreds of thousands of unemployed workers, many of whom would probably be more than willing to work for less money as long as they have a job. A lack of quickly available replacements gives employees leverage, not a glut of unemployed workers.

Quoting flyby519 (Reply 43):
Yea, and now instead of having those 18th century workers in cotton fields or factories, they are working for companies like Apple and Google in industries where innovation is leading the business forward.

I think you are missing his point. Companies and industries such as Apple and Google have been able to thrived because of bankruptcy laws, as investors are more willing to take the risk to invest money in them as there is a (small) safety net if things go south. In a world without bankruptcy protections there would be less Apples and Googles out there, in fact there is a good chance there would be no Apple considering they were almost bankrupt a little more than 10 years ago.

[Edited 2012-08-17 10:27:56]
 
SonomaFlyer
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 5:29 pm

Quoting flyby519 (Reply 43):
Im not saying the entire airline industry should wither and die, but there is too much overlap. Low barriers to entry and high barriers to exit. Airline investors throw good money after bad in hopes of ...? The airline business model needs to develop into one that is sustainable without a rotating bankruptcy cycle.

To do what you suggest is to change the fundamental nature of the relationship between the airline and its employees. So far, Delta seems to be getting things right with how its handling its employee/union relations. The next big economic and/or fuel price shock will test that theory.

Things went haywire post deregulation due to:
1. The race to the bottom on fares;
2. Airlines being slow to modify their business in a deregulated world;
3. Recessions where the airline wasn't able to contract routes/capacity enough to meet the lowered demand (as well as lower costs/staffing);
4. The massive run-up on fuel prices.

There needs to be the ability of the company to adjust for changes in the economy but the workers want as much job security and income as possible. I'm not saying these goals are mutually exclusive but we've seen this industry more than most struggle with adapting to economic realities.

I hope the sides come to an agreement but I suspect that won't happen during the bankruptcy period.
 
catiii
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 6:07 pm

Quoting xdlx (Thread starter):
APA Huge "step" For The Profession.

"Steps" can go in many different directions. Some forwards, some sideways, and some backwards. Time will tell which direction this step went in.
 
ikramerica
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 6:41 pm

This idea that non-stakeholders have a say in BK, or that BK shouldn't exist, is really none of their business. It's between the creditors and the company. If the creditors don't believe the company is viable, they will prefer liquidation. But if they think they have a better chance of getting more of their money back by the entity continuing, they will support reorganization with a stake in the reorganized company. The BK court creates an orderly procedure for this. Without it, creditors would STILL make that choice one way or the other, but the process would be more messy.

Not every company that goes into BK court would have "withered and died" without BK court. Many would have reorganized either way via transferring of assets to the creditors, under a new name, and possibly with more employment impacts. But there's a higher cost in doing it that way than there is in the orderly process of a BK proceeding.
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Alias1024
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 6:52 pm

Quoting seabosdca (Reply 39):
Quoting flyby519 (Reply 37):
If an airline goes bankrupt then it should go out of business. Period.

That was how business worked in the 18th century. It didn't work, because it created huge incentives not to engage in economic activity at all. Fixing that problem is how the bankruptcy system arose in the first place.

There are cogent arguments that Chapter 11 is too easy to access, but having no bankruptcy system is a recipe for economic disaster.

[Edited 2012-08-17 08:52:05]


Spot on. The ability to restructure a business helps protect creditors by providing a potentially more lucrative alternative to liquidation.

Quoting flyby519 (Reply 43):
Yea, and now instead of having those 18th century workers in cotton fields or factories, they are working for companies like Apple and Google in industries where innovation is leading the business forward.

Im not saying the entire airline industry should wither and die, but there is too much overlap. Low barriers to entry and high barriers to exit. Airline investors throw good money after bad in hopes of ...? The airline business model needs to develop into one that is sustainable without a rotating bankruptcy cycle.

You think the airline industry has low barriers of entry? The money required and regulatory environment makes airlines one of the toughest industries to enter. You mentioned Apple. That's a low barrier of entry industry. Two guys put a few hundred bucks into parts, made a prototype in their garage, and started selling it to their computer club buddies.
It is a mistake to think you can solve any major problems with just potatoes.
 
ckfred
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RE: APA Huge "step" For The Profession.

Fri Aug 17, 2012 9:06 pm

[

Quoting SonomaFlyer (Reply 45):
I hope the sides come to an agreement but I suspect that won't happen during the bankruptcy period.

On another thread, there is a report that the creditors' committee issued a statement saying that both AA and AE need to enter into contracts that aren't imposed upon by the judge. However, the committee also said that AA shouldn't give any more economic value to the unions. There just isn't enough to allow AA to successfully exit bankruptcy and compete effectively.

That should be a signal to APA, APFA, and AE unions that they should take what has been offered and live with it, particularly since some of the committee members will become shareholders upon exit from bankruptcy.

The only thing I would suggest is that management reduce the length of the contracts. APA doesn't want a 6-year contract, and I don't blame them. Make it 2 or 3 years from when AMR is discharged from bankruptcy.