Pinnacle Seeking Wage/vacation Cuts

stlgph · Fri Aug 17, 2012 5:55 pm

If you go to this website and click the document under 8/17/12 - you can read the latest SEC filing report from Pinnacle.

http://phx.corporate-ir.net/phoenix.zhtml?c=131072&p=irol-sec

In short ... Pinnacle's seeking $76 million in targeted costs and one of the big ways they're looking to do it is wage reductions of 6% for non union employees, cutting back on 401K matching and health care plan options, and also looking to cut back vacation time by one week per eligible employee.

Pretty certain that's going to send a lot of people looking for other jobs, I could be wrong, but I personally wouldn't stick that out ... but good luck to the ones who decide to stick it out.

Also in the report, the ceo says their chapter 11 filing was due to a loss of flying by Delta for their 50 seaters, and rivals undercutting cost operations for their 76 seaters.

As I write this, Pinnacle shares are at 43 cents.

Good luck Pinnacle employees.

[Edited 2012-08-17 10:56:56]

RiverCityFlyer · Fri Aug 17, 2012 6:14 pm

This is going to be an interesting ride. Not only for the employees, but for PNCL as a whole. Best of luck!

norcal · Fri Aug 17, 2012 6:51 pm

Quoting stlgph (Thread starter):

Actually I think the pilots are the ones that are going to take it in the shorts, not non-union employees. Pinnacle management want the pilots to contribute $59.6 million annually in give backs. That's the lion share of what the company "needs."

I think Pinnacle will cease to exist when all their pilots bail and head to the majors and there is no one left who wants to work under their term sheet.

stlgph · Fri Aug 17, 2012 6:54 pm

Quoting norcal (Reply 2):

Totally agree. They mention how they need to bring their CRJ-900 costs in alignment with their rivals ... the writing is right there... the water is churning.

futureualpilot · Fri Aug 17, 2012 7:07 pm

The terms for the pilots are a freaking joke. So many hard working people, both above and below the wing that have to bear the brunt of piss poor management. For anyone who inks this is even remotely the union's fault I can tell you first hand this one rests solely on management ineptitude. Best of luck to all of the rank and file there. You all deserve better. Management ought to be ashamed to show up at work every day.

Aesma · Fri Aug 17, 2012 7:10 pm

According to wikipedia :

On February 24, 2012, Pinnacle wanted to invoke a 5% permanent pay cut for all pilots - a move which CEO Sean Menke insisted was necessary to prevent the company from filing for Chapter 11 bankruptcy protection. Less than a month later on March 21 of 2012 however, Menke was given a 60% pay raise from $425,000 to $675,000 along with executive vice president John Spanjers receiving a 45% raise from $275,000 to $400,000. Ten days later, Pinnacle filed for Chapter 11 on April 1, 2012.

When will they learn ?

futureualpilot · Fri Aug 17, 2012 7:26 pm

Don't forget signing money losing contracts on the CRJ-900s and not performing due diligence to see that the Q400 contract wouldn't be sustainable with what amounted to be a very average pilot contract. Piss poor day to day operations, terrible long term training implementation, scheduling that made no sense, maintenance band-aids rather than fixes, an ill-timed headquarters move to a new and hugely expensive location, running three SOCs and failing to integrate them for more than a year, failing to properly staff the place leading to even more costs, consistent and egregious payroll errors, enormous raises for top tier executives (one of whom left the company anyway) and a "consulting fee" for the deposed CEO that bungled everything up in the first place, refusing to renegotiate with ALPA despite the union having developed a plan that would save more money and maintain pilot pay without slashing pay or work rules as Ch. 11 became increasingly imminent, and more.

[Edited 2012-08-17 12:28:16]

[Edited 2012-08-17 12:32:59]

toltommy · Sat Aug 18, 2012 2:55 am

Quoting stlgph (Thread starter):
wage reductions of 6% for non union employees

This can't be right. How many non-union employees are left? The PinnPro rampers were USW. They've all been let go. The pilots are ALPA.
The FA's were AFA (pre merger Mesaba) and USW (pre merger Pinnacle), and a recent election selected AFA as the union for all.
Pinnacle mechanics were non-union (IIRC), Mesaba mechanics were AMFA.

Where are the savings coming from?

thegreatRDU · Sat Aug 18, 2012 3:11 am

Sucks.....it would've demoralized the sh*t out of me.....

PHLapproach · Sat Aug 18, 2012 3:42 am

Quoting toltommy (Reply 7):
This can't be right. How many non-union employees are left? The PinnPro rampers were USW. They've all been let go. The pilots are ALPA.
The FA's were AFA (pre merger Mesaba) and USW (pre merger Pinnacle), and a recent election selected AFA as the union for all.
Pinnacle mechanics were non-union (IIRC), Mesaba mechanics were AMFA.

Where are the savings coming from?

Likely the tons of middle managers and office people that all airlines are riddled with.

toltommy · Sat Aug 18, 2012 3:54 am

Quoting PHLapproach (Reply 9):
Likely the tons of middle managers and office people that all airlines are riddled with.

Okay, how many could a small airline like Pinnacle have? 500? 1000? How many could there really be? Pinnacle isn't that big....

flight152 · Sun Aug 19, 2012 7:37 pm

I quite frankly find it disturbing that this thread only has ten posts on a topic started two days ago. There are literally hundreds of posts on meaningless conversation about a new livery or speculation on an aircrafts' profitability, while this is dire situation for hundreds of pilot’s and other airline employees barely register on the radar of an airline enthusiast forum. It’s almost as if people here don’t even care that the decisions made about these concessions could affect Pinnacle, and the very being of every other regional for years to come.

The people of Pinnacle deserve better and yet another colossal fu*k of by management has forced these terms upon those who safely fly our loved ones around each and every day. Carry on airliners.net, I’m sure another thread on starting up the 757 production line should catch everyone’s attention.

[Edited 2012-08-19 12:39:06]

ASFlyer · Sun Aug 19, 2012 7:49 pm

Quoting Flight152 (Reply 11):
I quite frankly find it disturbing that this thread only has ten posts on a topic started two days ago. There are literally hundreds of posts on meaningless conversation about a new livery or speculation on an aircrafts' profitability, while this is dire situation for hundreds of pilot’s and other airline employees barely register on the radar of an airline enthusiast forum. It’s almost as if people here don’t even care that the decisions made about these concessions could affect Pinnacle, and the very being of every other regional for years to come.

The people of Pinnacle deserve better and yet another colossal fu*k of by management has forced these terms upon those who safely fly our loved ones around each and every day. Carry on airliners.net, I’m sure another thread on starting up the 757 production line should catch everyone’s attention.

In case you hadn't been paying attention, most of the airline enthusiasts at this site could care less about the employees of the airlines they all slobber over. In fact, at this site, there is a very large anti-union/employee sentiment. Anytime pay cuts / work rule changes come up the blame always solely rests at the feet of the evil, bad unions that dare to try to provide decent quality of life for their members. It's never managements fault, always the unions. So yeah, it doesn't surprise me one bit that nobody cares about the employees at Pinnacle. If anything, I would have expected this to devolve into the normal union bashing forum by arm chair airline manager/enthusiasts here.

azjubilee · Sun Aug 19, 2012 8:02 pm

July 1, 2010 was the beginning of colossal debacle. The sale of Mesaba should never have happened. Now, there are 2 less airlines in this train wreck and mgmt has bungled this merger from the very beginning. At every turn of events, mgmt managed to screw it up. Delta isn't innocent in this drama either, since they're the ones that started this whole process to begin with. One of the worst things is that this is Ch 11 #2 for many of the XJ people still there and they will get screwed the most of this bankruptcy. They saw the least (if any) gains with the new joint contract, arguably got the biggest screwing in the SLI and now they're going to give up again? This whole thing is disgusting. Pinnacle and Colgan folks saw huge gains and now have to give up to the point where it will be worse than when they arrived? Also disgusting. In the end, everyone is still getting screwed by what Phil T and his cronies started. Glad I'm gone and best of luck to my former colleagues.

RJNUT · Sun Aug 19, 2012 8:10 pm

Quoting ASFlyer (Reply 12):
In case you hadn't been paying attention, most of the airline enthusiasts at this site could care less about the employees of the airlines they all slobber over.

huh..i agree.... i was part and parcel part of the Pinnacle debacle as I was one of the orginal Republic Express I employees in MEM in 1985(the Mike Brady Bunch) and even then it was an employee nightmare! so i have followed this story for decades and , I too,am glad I said "sayonara" to this cherade!

flyingsux · Sun Aug 19, 2012 8:18 pm

Quoting ASFlyer (Reply 12):
In case you hadn't been paying attention, most of the airline enthusiasts at this site could care less about the employees of the airlines they all slobber over.

Cha-ching! You coulnd't be more correct! That's why this site irritates me so much.

flyingsux · Sun Aug 19, 2012 8:34 pm

Comair, Regional Elite, Pinnacle ... the whole industry is a disgrace. Nowhere else is it completely acceptable for employees to constantly give, give, give. These people bust their a$$ while management, telling them to keep up the good work and be proud of the job they're doing, walks away with over-stuffed pockets. For years I've said it will get better, but I was wrong - there is no end in sight. I don't work for any of them, but my days are numbered too, and I'm glad!

NWAESC · Sun Aug 19, 2012 10:24 pm

Quoting Flight152 (Reply 11):

Quoting ASFlyer (Reply 12):

Best. Posts. Ever.

nwadeicer · Mon Aug 20, 2012 12:42 am

Quoting Flight152 (Reply 11):
Carry on airliners.net, I’m sure another thread on starting up the 757 production line should catch everyone’s attention.

But will they have AVOD and real cloth napkins for the Aluminum Elites?

Cubsrule · Mon Aug 20, 2012 1:15 am

Quoting FlyingSux (Reply 16):
hese people bust their a$$ while management, telling them to keep up the good work and be proud of the job they're doing, walks away with over-stuffed pockets.

Which manager(s) at Pinnacle are paid too much?

I think this post misses the point. The point isn't that any manager is raiding Pinnacle. The point is that in the race to the bottom, lots of things - including wages for front line employees - get squeezed. I see that as a legacy problem, not a Pinnacle management problem, however.

FlyPNS1 · Mon Aug 20, 2012 1:50 am

Quoting Flight152 (Reply 11):
Carry on airliners.net, I’m sure another thread on starting up the 757 production line should catch everyone’s attention.

To be fair, Pinnacle isn't a "real" airline in the eyes of most people. Pinnacle doesn't sell tickets, doesn't control it's product or have a say where it flies. When pay cuts/layoffs have come up in threads about most major airlines, it gets lots of attention, so I don't think this board ignores employee welfare.

Granted, I don't think employee welfare is the highest priority on a.net...but that's true of most customer/employee relationships. Do most people buying iPhones care about the sweatshops that the people manufacturing iPhones work in? No. Do most people shopping at Wal-Mart care about the crap pay/benefits of Wal-Mart workers? No.

Quoting FlyingSux (Reply 16):
Comair, Regional Elite, Pinnacle ... the whole industry is a disgrace.

There is a silver lining however in that conditions at most of the majors are slowly starting to get better (AA the only exception because of being late to the restructuring game). And to be fair, employees at the regionals (particularly pilots) have been their own worst enemies. They've been willing to accept crap conditions for the hope of eventually getting on with the majors and "cashing in".

Acey559 · Mon Aug 20, 2012 3:11 am

I read the term sheet last week (EGL ALPA decided they should send it to us in an effort to say, "See, our 1113 isn't that bad." Great move.

) Anyway, I feel for all the folks at Pinnacle, they're really being served up a crap sandwich. I heard they're losing 50-60 pilots a month who are fed up with all this BS. Some are getting on with the majors that are hiring or corporate and some I guess are leaving the industry altogether. It's a bumpy road but hopefully they can come together and do what's best for themselves and get some semblance of a career back.

dtwpilot225 · Mon Aug 20, 2012 11:23 am

when someone buys a delta ticket, there is a good chance they will fly on pinnacle so they SHOULD care about what the pilots are making. There is no reason pinnacle should be in chapter 11, its a sham to begin with. It all started with the purchase of colgan and then mesaba. Their management chose to grow by aquiring rather then from within. They didnt even seek concessions before they decided to get rid of the q400's which shows that everything happening to pinnacle has been planned out by delta years ago probably. As employees trying to provide for familes, pinnacle employees have to work through the stress to provide safe flights for the public. The wage and health insurance cuts being proposed to them will take them back to rates that were worse than their 1999 CONTRACT!!!!
Undercutting has to stop. Its going to lead to undercutting peoples safety and lives.

saab2000 · Mon Aug 20, 2012 12:07 pm

Quoting Flight152 (Reply 11):
I quite frankly find it disturbing that this thread only has ten posts on a topic started two days ago. There are literally hundreds of posts on meaningless conversation about a new livery or speculation on an aircrafts' profitability, while this is dire situation for hundreds of pilot’s and other airline employees barely register on the radar of an airline enthusiast forum. It’s almost as if people here don’t even care that the decisions made about these concessions could affect Pinnacle, and the very being of every other regional for years to come.

This is why this forum is largely a waste of time. They care more about cheatlines in liveries than about actual airlines flying actual passengers. This is amplified when it is a 'regional' airline, most of which in the US are larger than some national carriers that get a lot of attention here.

My 'regional' airline is almost as big as my former national carrier (and operates more daily flights if I'm not mistaken) and yet is virtually unknown.

Just spend time lurking and educating yourself, but don't expect the average airline fanboy to be really very knowledgeable about actual airline business operations.

bahadir · Mon Aug 20, 2012 12:51 pm

This is what corporate America has become.. Take away more and more from employees and give more and more to shareholders. (I don't know why would anyone get PNCL shares but that's a different story)

bobnwa · Mon Aug 20, 2012 1:01 pm

Quoting NWAdeicer (Reply 18):
But will they have AVOD and real cloth napkins for the Aluminum Elites?

The AVOD message will also want to know about Delta's 764's .

Cubsrule · Mon Aug 20, 2012 1:03 pm

Quoting bahadir (Reply 24):
This is what corporate America has become.. Take away more and more from employees and give more and more to shareholders. (I don't know why would anyone get PNCL shares but that's a different story)

Is there some evidence that the regional race to the bottom has created shareholder value? It certainly has not at companies like Pinnacle.

xjet · Mon Aug 20, 2012 1:55 pm

Quoting FlyPNS1 (Reply 20):
And to be fair, employees at the regionals (particularly pilots) have been their own worst enemies. They've been willing to accept crap conditions for the hope of eventually getting on with the majors and "cashing in".

I understand your point, however what other options to regional pilots have? If we want to have a career we have to start somewhere. Major airlines are the best gigs in the industry (121 scheduled). To get there we need experience. Am I supposed to keep my crappy flight instructing job until the regionals start paying better? No, I took the pesky RJ job. It's a problem of leverage. And regional pilots have less of that "magic L word" than anyone else. We get squeezed by the major carriers cost demands, which then get passed down to the regional employees.

Sure, in a perfect world the regionals wouldn't exist, all flying would be mainline. The regionals wouldn't fly anything bigger than an E-120. But that ship sailed long ago, before most of us were out of high school, in fact. My hope, and the hope of most RJ guys, is that mainline pilots will be successful in restoring flying at the mainline level thereby giving us an opportunity to leave this regional rat race. Until such time, we do what we can to get fairly compensated for our work. But between the Ch. 11 laws and the RLA, there isn't much we can do.

FlyPNS1 · Mon Aug 20, 2012 11:48 pm

Quoting XJET (Reply 27):
I understand your point, however what other options to regional pilots have?

Admittedly, you guys are in a tough position. You did have one other option, but it would have been difficult to pull off.

Back when Comair pilots fought for better pay/benefits, you could have supported them by demanding that your contract be equal or better when it came due for renewal. Instead, many of the regionals knowingly undermined the OH contract, so that they could get the OH flying. This meant faster upgrades for junior guys at the regionals, but cost you a lot more in the long run.

Now I realize that this would be difficult to coordinate, but the willingness of RJ labor groups to undermine each other set the stage for the current race to the bottom.

KingAir200 · Tue Aug 21, 2012 1:19 am

Quoting azjubilee (Reply 13):
The sale of Mesaba should never have happened. Now, there are 2 less airlines in this train wreck and mgmt has bungled this merger from the very beginning.

I can't agree with that enough.

xjet · Tue Aug 21, 2012 2:48 am

Quoting FlyPNS1 (Reply 28):
Back when Comair pilots fought for better pay/benefits, you could have supported them by demanding that your contract be equal or better when it came due for renewal. Instead, many of the regionals knowingly undermined the OH contract, so that they could get the OH flying.

That would have been very difficult to pull off. But... ACA and Air Wisconsin did pull this off. They had great contracts in place for their pilots. Mesaba did as well. At that's part of the point. The greatest regional carriers have since been eliminated. I understand that if we all cost the same no one would be cheaper. But, this industry will always have its cheaper alternatives. ACA, Comair, and Air Wisconsin all lost a huge chunk of flying during the rise of Mesa, Skywest, and Chatauqua.

At my company, we didn't get a chance to negotiate a contract until after 9/11, but when we did it was better than most others at the time. And there is no doubt that this happened in great part due to the spine of the Comair pilots during their strike.

Quoting FlyPNS1 (Reply 28):
but the willingness of RJ labor groups to undermine each other set the stage for the current race to the bottom.

That may true of some RJ employees. Some alter-ego carriers have been created using employees that were looking for the quick road. But I wouldn't say it is the norm. Most guys are flight instructors and have a few places they would like to work, but in the end most guys will go wherever they can at the time. If your lucky you had a few friends at Comair, CoEx, or ACA, back in the day. But a lot end up at GoJet, Mesa, and Silver Airways. It's really difficult to grasp the way this regional rat race works until you are inside. When you are flight instructing or time-building most don't understand the way the contracts, etc work. There needs to be better education by ALPA and other organizations to the future pilots to help in this area.

Mir · Tue Aug 21, 2012 3:24 am

Quoting Cubsrule (Reply 19):
I see that as a legacy problem, not a Pinnacle management problem, however.

The legacies are involved in it, to be sure, but Pinnacle's management did a horrible job, as futureualpilot detailed in Reply 6.

Quoting Cubsrule (Reply 26):
Is there some evidence that the regional race to the bottom has created shareholder value?

It has created shareholder value for those who hold shares in the legacies. But not for those holding shares in the regionals. I don't see how that's sustainable, so something is going to have to change.

-Mir

Goldenshield · Tue Aug 21, 2012 11:20 am

Quoting XJET (Reply 27):
Sure, in a perfect world the regionals wouldn't exist, all flying would be mainline. The regionals wouldn't fly anything bigger than an E-120.

In a perfect world, the regionals would be doing their own flying again, doing what they are doing now, except with their own brand, not being told what to do by some mid-level manager at another airline---in essense their OWN mainline. Why? Because the market demands there be options, and why should they be limited to an aircraft class that isn't even being made anymore, and has no replacement in the forseeable future? What is this, Soviet Russia?

That said, every "mainline" as it exists now, were all regionals at one point in time. American, United, USAirways, Delta, they all have regional airlines to thank over the past 100 years as to why they are so massive now. The same will happen to the regionals of today eventually. You can't deny that evolution is alive an well in this industry. There will be winners, there will be losers. Some will grow; many will die.

[Edited 2012-08-21 04:22:19]

Cubsrule · Tue Aug 21, 2012 12:18 pm

Quoting Mir (Reply 31):
It has created shareholder value for those who hold shares in the legacies.

Which legacies? Not AA, UA, US, DL or NW, all of whose shareholders took at least one hair cut via bankruptcy since the regional jet era began. If it had kept some carriers out of bankruptcy, I might agree with you. But empirically, I don't see much evidence that it has created shareholder value even at legacies. CO managed to stay out of bankruptcy even though it largely sat out the race to the bottom. AA sat out the race to the bottom and held off out of bankruptcy for far longer than its peers. I'm not going to argue that there's a causal link there, but we can't just assert that the race to the bottom created shareholder value for legacies because it's not that obvious.

xjet · Tue Aug 21, 2012 6:51 pm

Quoting Goldenshield (Reply 32):
What is this, Soviet Russia?

No of course it isn't. I worded my statement poorly. I actually agree with you. I think the regionals should be what Bar Harbor, Rocky Mountain, PBA, etc were like way back then. I shouldn't have tied my argument to aircraft size, and I in no way think that it should be regulated.

Mir · Tue Aug 21, 2012 6:58 pm

Quoting Cubsrule (Reply 33):
If it had kept some carriers out of bankruptcy, I might agree with you. But empirically, I don't see much evidence that it has created shareholder value even at legacies.

I suspect the damage at the legacies would have been even worse had the regionals not been there.

-Mir

Cubsrule · Tue Aug 21, 2012 7:37 pm

Quoting Mir (Reply 35):
I suspect the damage at the legacies would have been even worse had the regionals not been there.

Maybe. But the fact that you and I suspect it doesn't make it so.

Airline management is somewhere that people who like airplanes hang out. By and large, it's not somewhere that shrewd businesspeople hang out.

xjet · Tue Aug 21, 2012 10:03 pm

Quoting Mir (Reply 35):

Just another point to consider regarding the relationship between majors and their regional "partners".

We all know 50 seat jets have become incredibly uneconomical in most situations. Yet, the majors are required to continue to fly them because of Scope and longterm CPAs with the regionals. If they had simply flown them in house, they would be more free to fleet the short haul regional fleet as needed instead of now needing scope and CPA relief. I realize there are also aircraft leases to consider, but most majors are leasing these planes anyway, so the outsourcing hasn't eliminated that little nugget.

Insourcing = control = flexibility. In this regard at least. But what do I know.. I'm just a front-line guy.

enilria · Tue Aug 21, 2012 11:19 pm

Quoting stlgph (Thread starter):
Also in the report, the ceo says their chapter 11 filing was due to a loss of flying by Delta for their 50 seaters

Originally they said the CRJ-200 part of their operation was the only part under a good contract and they used that to justify getting rid of the company's other flying contracts. The reality is that now that DL controls Pinnacle in Ch11 they are going to wipe them out but drive costs as low as possible on the way.

Quoting norcal (Reply 2):
I think Pinnacle will cease to exist when all their pilots bail and head to the majors and there is no one left who wants to work under their term sheet.

More likely when DL eliminates all their 50 seats.

Quoting futureualpilot (Reply 4):
For anyone who inks this is even remotely the union's fault I can tell you first hand this one rests solely on management ineptitude.

No, most of the employees make McDonalds wages already. I almost think the DOT should set up minimum wages for safety reasons!

Quoting Aesma (Reply 5):
Less than a month later on March 21 of 2012 however, Menke was given a 60% pay raise from $425,000 to $675,000

Well, the real story there is that the old CEO left at the perfect moment as the company was collapsing under his poorly written contracts. Menke and Christie arrived from F9 not knowing the company was completely screwed. Like any CEO they gave him a moderate salary and big stock options that could be worth millions. When he realized he had been betrayed about the company's condition and that the options were worthless, he said I'm leaving and they offered Menke more money to stay and let Christie out of his contract. He was probably happy to be out of that mess, but I think he moved his family there and bought a house for the few months he was there, so didn't exactly make out. I believe he is unemployed. I'm sure they would be suing each other if either had any money.

bahadir · Wed Aug 22, 2012 12:30 pm

Quoting enilria (Reply 38):
He was probably happy to be out of that mess, but I think he moved his family there and bought a house for the few months he was there, so didn't exactly make out. I believe he is unemployed.

The difference is an unemployed CEO/COO still sends his kids to private school, an unemployed regional pilot suffers quite a bit. Heck, we even have employed regional airline pilots qualifying for food stamps.

Cry me a river about Menke and Christie.

dtwpilot225 · Wed Aug 22, 2012 12:57 pm

Mehnke and christie knew exactly what was going on when they came here. They were brought in to be the outside party that would change pinnacle into mesaba. Pinnacle people in charge: replace the CEO then have the new CEO replace all the pinnacle execs with mesaba execs and line all the people up in the right spots. For example, make spanjers the c.o.o. Then mehnke and Christie leave and spangers takes over and bingo, you have mesaba with a pinnacle name. Pinnacle will be headquartered in msp soon and mem will close. Delta orchestrated this whole thing

Cubsrule · Wed Aug 22, 2012 1:09 pm

Quoting bahadir (Reply 39):
The difference is an unemployed CEO/COO still sends his kids to private school, an unemployed regional pilot suffers quite a bit. Heck, we even have employed regional airline pilots qualifying for food stamps.

. . . and yet both parties make much less money than they could doing similarly skilled jobs in other sectors. It's a fascinating dynamic.

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