RUMOR: UA Looking At Bids For Outsourcing

tommy767 · Tue Apr 01, 2014 10:02 pm

CO: Risoli ('85(, Pineau-Boddison ('90), Laderman ('88), Hilfman ('81 EA/CO), Edwards ('79 but stayed with CO through the '80s.) Vast majority of the officers are from the Bethune era.

LOWS · Tue Apr 01, 2014 10:04 pm

Quoting RDH3E (Reply 111):
Well, NK has shown us that isn't true.... But it's a decent enough anecdote.

NK isn't pretending to be a world class airline, either. UA, on the other hand, pretends to be.

BCEaglesCO757 · Tue Apr 01, 2014 10:07 pm

Smisek should read this NYTimes interview from about 10 years ago.

http://www.nytimes.com/2010/01/03/business/03corner.html?_r=0

I won't doubt he is a bright man,but from a distance his leading and people skills leave a bit to be desired.

MaverickM11 · Tue Apr 01, 2014 10:10 pm

Quoting LOWS (Reply 115):
NK isn't pretending to be a world class airline, either. UA, on the other hand, pretends to be.

There really isn't much UA is doing that other "world class airlines" aren't mimicking or already doing, whether it's outsourcing ground handling, or anything else. Heck, they could get rid of F on all their domestic narrowbodies, pull out nearly all the IFE, and they'd be one of any number of EU carriers.

BCEaglesCO757 · Tue Apr 01, 2014 10:15 pm

Quoting tommy767 (Reply 114):

Bethune didn't take the helm until 1994.

Pretty sure those are all Lorenzo era guys,who were blown out and shown the door.

tommy767 · Tue Apr 01, 2014 10:18 pm

Quoting BCEaglesCO757 (Reply 118):

Um, then you should take a look at their profiles because what I posted is straight from the UA leadership page:

http://www.unitedcontinentalholdings....php?section=about&page=leadership

BCEaglesCO757 · Tue Apr 01, 2014 10:33 pm

The people I'm talking about who RAN the old Continental,who actually reported to Bethune, who made it what is are your Debbie McCoys, C.D. McLean, Larry Kellner. People who actually made big decisions.

They are long gone and the current UA is NOT how they ran CO.

[Edited 2014-04-01 15:34:34]

tommy767 · Tue Apr 01, 2014 11:06 pm

Quoting BCEaglesCO757 (Reply 121):

This is factual -- there are old school CO and EA people at the new UA which is my point. Perhaps the outsourcing in Hawaii is a page from the Lorenzo days at your former company, but we will never know.

I took this information from the UA site. They are officers at your company, and you should know this instead of it being me who has to be the informant. Never have I mentioned Tilton, Wolf, or Ferris in this conversation. However, at this time all three of them are more suitable to do the job than Smisek right now.

BCEaglesCO757 · Tue Apr 01, 2014 11:32 pm

Quoting tommy767 (Reply 122):

My whole point.....the high ranking officers with major visibilty who ran CO (as I named above ) are long gone.
The current company is NOT being run the way CO was run.

That is factual. The 'Working Together' theme and way of doing things is GONE.

All three more suitable ? I'll give Jeffery this....three months in and he didn't have us in BK.

tommy767 · Tue Apr 01, 2014 11:38 pm

Quoting BCEaglesCO757 (Reply 123):

How? Explain? You say this, but you are not stating why it's so different?

MaverickM11 · Tue Apr 01, 2014 11:47 pm

Quoting BCEaglesCO757 (Reply 123):
All three more suitable ? I'll give Jeffery this....three months in and he didn't have us in BK.

As good/bad as it is now, just about every metric is better than it's ever been in the last 1-2 decades for UA, whether it's stock price, or on time performance, or consumer complaints, or RASM, you name it.

BCEaglesCO757 · Wed Apr 02, 2014 12:11 am

Quoting tommy767 (Reply 124):

Staffing. IAH short staffed out the a&%#

People working 2-3 man 737-800's and even 757's. Ontime performance is wretched.
People are doing the job of 2-3 people at times at IAH. I'm sure other departments are overworked too.

Tell me Tommy767, why would the company offer authorized unpaid time off for 300 people for 2-3 months in the SUMMER when you know you need help the most. Who does that ? That's not how we used to do things.

We used to wait for customers bags. Now ??? Close the door and kick that bad boy outta here. Scheduling flights for 8am and then leaving at 730am with no notice. That's not how CO did things.

Why do I need to explain ? I only work here,but you know better.

[Edited 2014-04-01 17:14:33]

apodino · Wed Apr 02, 2014 1:13 am

I think of the situation like this. Let's say Tabasco, which grows and picks it's own peppers by hand to ensure quality, decided that they wanted to save money by outsourcing pepper production and buy peppers from a third party. In doing so, the quality of the peppers goes down, and thus the quality of the finished Tabasco Sauce went down as a result. Yes the product is cheaper but the quality isn't as good, so people stop buying the product. This is exactly what I think is happening with United Airlines today.

I fly all the airlines regularly, and it seems to me that UA tends to carry a lot more leisure passengers than either AA or DL on routes that to me seem like good business travel routes. The financials I have seen in recent months would seem to back this up. UA is trying to fix a revenue problem by treating it like a cost problem. And in doing so, they have created that bad bottle of Tabasco Sauce from the bad peppers, where the competitors are picking the juicer, more tasty peppers.

codc10 · Wed Apr 02, 2014 1:27 am

Quoting tommy767 (Reply 114):
CO: Risoli ('85(, Pineau-Boddison ('90), Laderman ('88), Hilfman ('81 EA/CO), Edwards ('79 but stayed with CO through the '80s.)

Great, so merely because these individuals have some longevity at the company, they're now Lorenzo disciples? This is a load of garbage.

Sandra Pineau-Boddison came from Chelsea and CO's food service program before the merger was actually quite good. I have met Sandra on a number of occasions and can tell you she is a bright, charismatic, pleasant person to be around and very good at what she does. UA's post-merger chintzyness with the catering budget has nothing to do with her history at CO.

Gerry Laderman is one of the gurus of aircraft finance and among the most respected in the industry. He's been called "the godfather of the EETC". Anyone who knows this business knows Gerry. Again, lumping him in with Lorenzo underscores your ignorance and, frankly, lack of a clue.

Dave Hilfman is a 'character' and may rub some people the wrong way, but I can assure you that CO sales staff were top-notch prior to the merger and, like everything else at this company, have been completely gutted in the name of cost savings since the company hit a brick wall in terms of integrating the operation.

So much of the post-merger cost savings were predicated on ambitious operational integration timetables which failed to take into account the possibility of years of labor deadlock. The cost savings have to come from somewhere, so the rest of the company is taking the hit. This has nothing to do with Frank Lorenzo...

737tdi · Wed Apr 02, 2014 2:17 am

I commented above and am going to comment again.

When it comes to OTS maintenance there is no way a contract mechanic can troubleshoot and repair a problem on every aircraft in service. BUT, these mechanics are used fairly often. I do not feel comfortable with this. Never have and never will. It is not his fault. It is the fault of the companies/airlines who hire him.

A lot of folks here think that WN outsources a lot of maintenance. Did you know one part they do not. OTS! They let minor things be done but no parts replacement. If it can't be put on MEL it is not worked by contract maintenance on an in service aircraft, that is my job. This is why we fly so much. Fix broken airplanes at home or OTS at other airports... Just thought you would like to know.

tommy767 · Wed Apr 02, 2014 3:22 am

Quoting MaverickM11 (Reply 135):

Alright, great. You provided a link. Now what are you disputing? What is your point? You haven't made that clear.

Quoting jayunited (Reply 133):

Which is sad. I'm sorry that is the case for employees as well. The management team clearly needs to change.

Even more sad, it works both ways as a customer. There have been numerous complaints over on FT for 3-4 week response rates with cheap (if any) compensation for IRROPS towards GS and 1K's. At PMUA, apparently response times for HVF was a day or less and rebookings almost immediately. Now that CO is driving the bus, they are taking the customer service metrics to the HVF's (less ambitious) which is driving revenue away from UA.

737tdi · Wed Apr 02, 2014 6:56 am

Why don't you go with my data. WN mechs are the only mechanics who repair our OTS aircraft. Period. If you hear of different let me know. We are the only folks authorized to work on our aircraft. Amazing isn't it?

LAXintl · Wed Apr 02, 2014 4:18 pm

Since you guys brought up EK and SQ.

Interesting choice as both of them outsource handling even at their respective home hubs !

Both receive global accolades even as a passenger likely never has contact with one of their employee until he or she board the aircraft.

Contract handling the the norm globally more often than not.

T5towbar · Wed Apr 02, 2014 4:26 pm

Well the 50 seat issue will come to a head soon with the rejection of the Express Jet TA. The only problem maybe is who is going to fly any more larger RJ's? Mesa and SkyWest will be flying the ones that on order so far. If RAH turns down their contract, who will fly any new orders and how will they staff them? That plays into this as well.

The 50 seaters will be eventually gone. The question now is how fast they can get rid of them? Hence the outsourcing of all the Tier 3 cities. IMHO, that will be completed by contracts end. We must now focus on Tier 2 (where insourcing is supposed to happen in this contract) and the hubs. At least preserve the scope there in the next contract.

malaysia · Wed Apr 02, 2014 5:02 pm

With all these rumors then one was that ONT and RNO are upcoming stations on chopping block as well

tyler81190 · Wed Apr 02, 2014 10:22 pm

Quoting malaysia (Reply 151):
With all these rumors then one was that ONT and RNO are upcoming stations on chopping block as well

I have not heard anything "credible" about specific stations being outsourced, only that the company plans to take inventory and see where they can cut. While I hope they arrive at a decision to not outsource anymore airports, I fear that will not be the outcome. Though I do think the Ramp Service will be outsourced before the above wing agents in many stations.

zippyjet · Thu Apr 03, 2014 12:59 am

Quoting N766UA (Reply 8):

And then there's that red herring called security. Outsourcing can be a prescription for disaster security wise. Would UA's operations at BWI be affected?

FlyDeltaJets · Thu Apr 03, 2014 4:05 pm

As a former DL employee of more than 5 years and hired under sUA at a line station I come to this airline with a different prospective. I honestly think UA's biggest problem is the management vs employee culture that has developed over the many years of distrust. The unions don't help it at all either. They do more propagandizing than representing. There is a lot of work that is being done and a lot more that needs to be done.

Rdh3e · Thu Apr 03, 2014 4:53 pm

Quoting codc10 (Reply 159):
Finally, guess where Richard Anderson started his airline career? At Continental in 1987 under Frank Lorenzo.

Half of DL leadership is formerly of either UA or CO, it's pretty funny actually:
Richard Anderson - CO
Gil West - UA
Glen Hauenstein - CO
Richard Hirst - CO
Holden Shannon - CO
Ned Walker - CO

So 6 of 11 senior execs, 6 of 9 non-lawyers.

[Edited 2014-04-03 10:37:33]

T5towbar · Thu Apr 03, 2014 7:58 pm

Quoting zippyjet (Reply 154):
And then there's that red herring called security. Outsourcing can be a prescription for disaster security wise. Would UA's operations at BWI be affected?

I think that BWI is a Tier 2 station. The 45 or so that is talked about are mainly Tier 3 stations.
I don't think they will affected in these three rounds, since they handle some volume and M/L. It serves a different market to the DC area like JFK and LGA does to EWR.

Quoting FlyDeltaJets (Reply 158):
As a former DL employee of more than 5 years and hired under sUA at a line station I come to this airline with a different prospective. I honestly think UA's biggest problem is the management vs employee culture that has developed over the many years of distrust. The unions don't help it at all either. They do more propagandizing than representing. There is a lot of work that is being done and a lot more that needs to be done.

Maybe so. Problem is that management never got in front of the issue. They knew it was going to be toxic from day one, and they did not try to get in front of it. IMHO, a much better straightforward buyout package would have solved a lot of this problem. Instead of some pyramid tiered scheme. That cheap approach didn't work. More than enough people who wanted out could have got out. And still, even after all of the representation issues, management dragged ass on contracts as well. And it is still not complete yet, with MX and FA's to have their issues settled.

toxtethogrady · Thu Apr 03, 2014 9:32 pm

Quoting codc10 (Reply 159):
Finally, guess where Richard Anderson started his airline career? At Continental in 1987 under Frank Lorenzo

My impression of Anderson was he is only interested in Richard Anderson. It's why he bailed out of Northwest to go to United Healthcare. And it's why he was willing to go back to Delta. He followed the bigger paychecks.

avek00 · Fri Apr 04, 2014 12:03 am

Quoting toxtethogrady (Reply 163):
My impression of Anderson was he is only interested in Richard Anderson. It's why he bailed out of Northwest to go to United Healthcare. And it's why he was willing to go back to Delta. He followed the bigger paychecks.

All joking aside, Anderson took the more positive aspects of Lorenzo's ways to heart, and has implemented them at Delta. In fact, Delta is basically the living version of Lorenzo's dream -- a large, highly efficient and flexible, essentially nonunion airline that's at the top of the industry with an ability to compete well with upstarts and legacies alike.

MaverickM11 · Fri Apr 04, 2014 2:45 pm

Quoting RDH3E (Reply 161):
Half of DL leadership is formerly of either UA or CO, it's pretty funny actually:

It seems like everyone, and I mean *everyone* who is anyone has done time at CO or US at some point in their career.

Quoting RDH3E (Reply 166):
On you note about the synergies, the beauty of it is that there is no real way to track most of it

They're perpetually overstated and underdelivered, in every merger, in every industry.

Quoting toxtethogrady (Reply 163):
He followed the bigger paychecks.

Is he making more at DL than United Healthcare?

tommy767 · Fri Apr 04, 2014 6:15 pm

Quoting CALMSP (Reply 170):

Can you confirm otherwise?

I read on this board that Gordo's time was numbered by the mid-2000s because of his refusal to cut costs.

777ord · Sat Apr 05, 2014 12:44 am

Quoting UA444 (Reply 2):
Can we outsource Jeff Smisek's job instead?

All one needs to do is read Gordon Bethunes "From Worst to First" and it is a carbon copy of what we've done wrong thus far. GORDON- PLEASE COME BACK!!!!!!!! There are tons of rumors of Smisek's departure. Most recently was his departure due on April 2. And a Hotelier taking reign.

Quoting LAXintl (Reply 5):
Even according to IAM, United averaged 35% savings by outsourcing the work for the last 6-stations they farmed out last fall.

The courtesy for IAM to bid on the work is just that a courtesy, not a serious belief they can manage to keep it.

The IAM said that? Jeesh, then it must be true. I wonder how many dollars are spent figuring this junk out that would actually be better used for other programs and projects. And, I dunno. keeping jobs? I'm not for or against the Union. Just a great set of work rules. If I want to baby sit people, I'll work for kinderkare, not an airline.

Quoting jayunited (Reply 12):

WELCOME TO MY RESPECTED USERS LIST!

COSPN · Sat Apr 05, 2014 10:51 am

It's not paying employees a few $$$$ that hurts UA last week my station paid out 88k in DBC. It's really not the station employees causing that . Meanwhile DL is packing MD 80s and we are within 200 miles of ORD but very hard to buy a seat

sldispatcher · Sat Apr 05, 2014 11:20 am

Quoting COSPN (Reply 179):
It's not paying employees a few $$$$ that hurts UA last week my station paid out 88k in DBC. It's really not the station employees causing that

United: Are you listening?

The recent thread on here about ExpressJet "imploding" from an operational standpoint made me wonder how many direct dollars are lost each due to operational issues on the Express side of things. Mainline still seems to try and hold it together.

With that in mind, how many dollars go out each day because of contract employees that might be making expensive choices as opposed to a loyal fully employed ground staff who at least begins to grasp that their company (i.e. United) health is tied to their paycheck?
It will be nothing more than the chickens coming home to roost. All of the legacy carriers like to take the cash, but blame the regional for problems and say "that is a different airline". Now the ground staff folks will be able to blame United for everything and say "we don't work for United"?

strfyr51 · Sat Apr 05, 2014 11:28 am

Quoting codc10 (Reply 138):
Again, outsourcing is the norm (literally) everywhere else in the world. In many respects, pre-merger United was behind the curve, but at the end of the day, the IAM agreed to this contract. They knew this was coming down the pike.

All of this is "Blather" We've had outsourced ramp and sometimes Maintenance for the 30 years I;ve been here. First we outsourced Heavy Maintenance which the MRO industry hounded United mnagment for years to do. We went through a LOT of vendors until we met up eith Timco Aviation who was run by a former Senior VP of Maint, Ron Utect, and then anothe Former Sr.VP of maint Bill Norman These guys KNEW what they had to do abd they also knew if they didn't deliver? We'd tear that airplane down to Parade RAST and send it back to them with EVERY flaw pointed out to them. Timco does Excellent work.
and they pass our rigirous test flights to return the airplane s to service because if they have any flaws or anomanies?? We fly them Right Back there for them to fix. and we accept no refly items at ALL. So outsourcing is not new. We also outsiource some line maintenance, We have some long time relationships with JettPro,. Timco Line Care, Skytechs in Canada, Parkland AV. in Canada. I've missed some but these guys are pretty darn good. If it's minor? they Handle it. rechecks etc. if the airplane needs troubleshooting?? We call in the Cavalry and get it fixed, Same as anybody else. It just Ain't all that Serious. I've Been a Maint controller 15 years. I wouldn't put my NAME on anything Shakey. The airplane can sit there until it turns into BEER cans before I'd risk My licenses.

brilondon · Sat Apr 05, 2014 12:30 pm

Could this lead to service improvements at UA, it really can't get worse.

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