Here's the "term sheet" bankrupt AA presented to the F/A union

Discussion in 'American Airlines | AAdvantage' started by kansaskeith, Feb 1, 2012.  |  Print Topic

  1. kansaskeith

    kansaskeith Gold Member

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    I don't pretend to understand all of it, but it does seem to say AA wants to do away with the international flight-attendant scale, and standardize it with the domestic one.

    Also it eliminates the 63 cents per hour for working the domestic aft galley. Hmmm, what do they do nowadays in the aft galley anyway? Warm up Boston Market sandwiches, I guess.

    http://www.apfa.org/images/bankruptcy/termsheet.pdf
     
  2. Wandering Aramean
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    Wandering Aramean Gold Member

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    I'm reading it now. I'd be pretty annoyed as an FA with these terms. They aren't particularly great compared to the current rules, particularly with respect to the number of hours they have to work to keep their job and benefits. It isn't pretty.

    Oh, and they're fully terminating the retiree health insurance plan for folks over 65. Period.
    Ouch.
     
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  3. DestinationDavid
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    DestinationDavid Milepoint Guide

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    Wow. Lots of FAs not sleeping tonight, because I sure wouldn't.

    Good luck to anyone who has flights tomorrow. There may be some grumpy FAs.....
     
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  4. kyunbit
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    kyunbit Silver Member

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    I am not sure these changes will be enough to get AA out of bankruptcy
     
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  5. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I'd bet cash they aren't. Their problems aren't just costly FA contracts.
     
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  6. DestinationDavid
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    I don't think anyone assumes these are the only changes AA will be making in the coming months.

    We've already seen quite a few changes to the schedule.
     
  7. kansaskeith

    kansaskeith Gold Member

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    The FA terms are only a portion, there is a whole lot more. There was a "term sheet" for the pilots uinon too, but unlike the FA union, the pilots union seemed to require a union password to access that term sheet, so I couldn't/didn't post that one. Probably a ground workers union term sheet too, or so I would guess. Nor are their steps all union. Schedule, nuliffying leases on planes, yada yada yada.
     
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  8. rwoman
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    rwoman Gold Member

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    One thing that has impressed me about AA is their customer service...especially at check in and on board (particularly international). While I know there are things that have to be done for them to survive bankruptcy, I hope it does not destroy morale and the employees' willingness to do a good job.
     
  9. kyunbit
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    kyunbit Silver Member

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    There is probably nothing worse than the feeling that you may be sacked despite giving your best for the job
     
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  10. KtownTraveler
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    KtownTraveler Silver Member

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    Oh I can think of a lot of things worse. But you're right it's bad.
     
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  11. Bluto
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    Bluto Silver Member

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    I will take that bet. PM if you want to stand by your bet offer.
     
  12. kansaskeith

    kansaskeith Gold Member

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    Bluto, you are saying the only problems AA has are with F/A contracts? Then why did the AA propose so much else yesterday, including cutting many more jobs than F/As, including managers, service personnel and pilots? Why did AA also issue a "term sheet" to pilots? I hope Mr. HaveMiles didn't take too much of your money on that bet :)
     
  13. Wandering Aramean
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    Wandering Aramean Gold Member

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    Agreed.

    Even all the labor cuts - expected to be near $1.25Bn annually - aren't enough. There has to be more on the revenue side or the company is done. Eviscerating the unions was the main goal of the bankruptcy from a costs perspective, but costs aren't the only problem the company faces.
     
  14. Bluto
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    Bluto Silver Member

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    No, that's not what I was saying. I thought the original statement by kyunbit was expressing doubt that AA would be able to emerge from bankruptcy without further changes than the ones they proposed yesterday. Clearly, they need savings from not just the FAs -- they'll need all of the savings they proposed yesterday from management, from lease restructurings, etc. I wanted to bet that the proposed changes would be sufficient to allow AA to emerge.

    If HaveMiles was talking just about the FA savings then I guess we were hoping to bet on different things.

    EDIT: Rereading HaveMiles's post, I realize he was just talking about the FA changes and I incorrectly thought he was talking about all changes. My bad! I do think AA will emerge from bankruptcy with the changes proposed yesterday.
     
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  15. garyst16
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    garyst16 Silver Member

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    I hate to say this about the covered medical issue, but so what? I lost my "post retirement" medical coverage when my employer changed their policies in 1990. Just because this action is in the public eye doesn't mean that others have not suffered the same consequence of cost cutting. My employer has continued with cost cutting measures, including just this month, cutting their 4% contribution to our retirement plan (for highly compensated employees). But again, it is not public info outside of our company. This is what companies do to remain profitable, to retain stockholders and keep all stakeholders happy...it isn't fun, and doesn't seem fair...but it is what it is...I feel sorry for the FA's and all of the other employees that will be affected by these changes and wish them all the best!
     
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  16. Skye1
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    Skye1 Silver Member

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    ..and, there are few things more adverse to the motivation to keep giving your best once that "feeling" becomes "knowledge."
     
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  17. zphelj

    zphelj Gold Member

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    With regards, my understanding of this offer is it's a) basically in line with what FA's get at other post BK airlines and b) going to be negotiated somewhat. Can anyone comment on A in particular?
     
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  18. Wandering Aramean
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    Wandering Aramean Gold Member

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    Doesn't make it any better. Just because everyone else got benefits taken away doesn't make it any more comfortable when it happens to you.

    Here's the thing - I don't think the terms really suck so badly. There are definitely cuts going on there and that sucks, but overall I think that the numbers they've got here for minimums and such actually aren't so awful. But they are definitely cuts from the current policies and that is going to sting a bit.
     
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  19. zphelj

    zphelj Gold Member

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    Thanks. I'm mostly interested in how the deal relates to similar comp plans at other US airlines with unions, etc. Nice to know it's not a deal below industry norms at least.

    I understand it's not comfortable when it happens but clearly change was coming one way or another. If those fine folks were walking around thinking their comp plan was not also going to change it's more a case of poorly managed expectations than anything. I've not heard projections of any realistic outcome that did not result in changing their work rules and comp to match the changes in their industry.

    I'm going to try and treat them extra nice while they work through this just the same. Forced job changes are no fun in any industry I'd imagine.
     
  20. FA morale has been terrible this year. Frankly, some of the FA behavior lately has been shameful.
     
  21. Pizzaman
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    I've been in the workforce for 20 years now. I have NEVER worked for a company that had a retiree medical option. These benefits were not sustainable when the airlines and unions agreed on them a ton of years ago. It was just a matter of how long it would be before they realized that.

    There are tons of companies that used to offer generous benefits like these. Heck, my father has 4 pensions coming to him. On the other hand, I have zero. Of those 4 pensions, 2 of those companies are BK, and a third has a pretty decent chance of handing their obligations over to the Pension Guaranty Fund.

    The companies that realized such benefits were unsustainable and made changes are surviving. The ones that didn't are most likely still not around. I can think of a large handful of names that don't exist anymore due in some small part to such obligations.

    I feel bad for anyone losing benefits or pay in these tough economic times. But nowhere near as bad as I do for friends who have lost their job through no fault of their own and can't find work.

    It was obvious to many that AA would have to make drastic changes. They were slow to do so, and the unions were uncooperative. Now, they're in BK and talking about sizable changes.
     
  22. autolycus

    autolycus Gold Member

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    Pizza man has hit the nail on the head.
     
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  23. Pizzaman
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    Even though I'm not a pro-union guy, I'm trying not to be overly critical of them. But, I can't help feeling that the negotations have been a bit like that line near the end of the movie Rounders, when Matt Damon's character asks Knish (still one of the all-time best movie character names) for money.

    Matt Damon: I need some money.
    Knish: How much?
    Matt Damon: I need $30,000.
    Knish: Jesus Christ. I need a BJ from Christy Turlington!"

    I'd like a pony for Christmas, and lifetime EXP, but neither of those is happening. And, these changes are inevitable at AA. Is it management's fault? Union's fault? Pretty immaterial now. Fighting about it and delaying an exit from BK isn't likely to help the situation.
     
  24. horseguy

    horseguy Gold Member

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    I am actually a pretty pro-union guy. Unions have been responsible for many really good labor reforms. Just as every cloud has a silver lining, every piece of silver seems to have a cloud. In other words, there is always a dark side. To me, the darkest side of unions is that they help groupthink to form among their members (http://en.wikipedia.org/wiki/Groupthink).

    Things can really go off the rails when the Groupthink gets pretty bad. I don't even want to use examples involving AA, because people get too emotional. We used to live in Champaign-Urbana. In our last years there, there was a GM parts plant near the area that GM's contract with the union allowed GM to close down. GM was going to do this because the labor costs were so high that the parts were simply not competitive. A group of investors came in, and offered to buy the plant. The investors stated that they would reduce wages by 50%, and continue to operate the plant in essentially the same way as before. Even with a 50% cut in wages, the plant would have no trouble at all filling all positions. However, because of the union contract, the current workers got to vote on if the sale from GM to the investors was allowed to happen. So, it came down to this:

    Option 1) Vote yes.

    Result: Plant is sold to investors. All wages cut by 50%. All jobs remain.

    Option 2) Vote no.

    Result: Plant is closed. Machinery in plant is sold off. Land is sold. All jobs lost.

    I would point out that even if a worker could do better elsewhere after the 50% cut, he could still vote yes to allow all his coworkers who wanted the job to continue working. Almost everyone outside of the workforce thought that a "yes" result was a forgone conclusion.

    The workers voted "no" by an insane margin. If I recall, it was something like 90% or 95% of them voted "no." The plant was closed, equipment sold off, land sold, and every single one of them lost their job.

    There were enough jobs involved that a local TV station had a news crew there to talk to workers after the vote. The reporter was clearly shocked and stunned when he heard the vote was "no". He interviewed workers and asked them why they voted that way. The response was they wanted to keep working for GM under the existing terms. The reporter pointed out that wasn't possible. The response was that the workers thought that GM management was bluffing. The response was the same from every worker so the reporter gave up.

    IOW, this group of people had convinced themselves that management was lying and that a plant closure was impossible.

    Now, back to AA. I've talked privately to a few AA employees in the last five years. To a one, they all thought BK was impossible.

    Groupthink in action can be pretty ugly.
     
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  25. autolycus

    autolycus Gold Member

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    Horseguy, that groupthink also led all the NWA flight attendants to believe that they were better off in a union making lower wages than being non-unionized, working under almost identical rules and paid more. They finally lost. I wonder how long before they realize the fight was stupid and all the DL FAs were right all along.
     
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