United Airlines may fail
Join Date: Jun 2001
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A management change in the works?
_________________________________________
United Airlines Grapples With Crisis
By Dave Carpenter
AP Business Writer
Wednesday, Oct. 24, 2001; 9:23 a.m. EDT
CHICAGO –– Officials of United Airlines' parent company headed into a meeting Wednesday amid the worst crisis in company history – and an uproar over a letter from United chief executive James Goodwin that sent the airline's stock plunging.
United officials declined to say whether the UAL Corp. board of directors was considering replacing Goodwin, despite widespread industry speculation.
Two unions representing United employees called for his resignation and the company's stock fell more than 20 percent last week after Goodwin said in a letter to employees that the airline was hemorrhaging cash and "will perish" sometime next year if it doesn't stem huge losses that have worsened dramatically since the Sept. 11 terrorist attacks.
United union leaders accused Goodwin of panicking customers and workers unjustifiably, and questioned his dire assertions. They claim his remarks were made to get contracted employees to agree to lower wages, gain negotiating leverage or get more government assistance.
United already was in deep trouble before the attacks, severely hurt by a downturn in business travel – upon which it depends more heavily than other airlines – and the highest costs of any major U.S. carrier.
Analysts expect United to report a quarterly loss of close to $1 billion or more when it releases third-quarter results on Nov 1. Included in that total will be a hefty charge for the costs of laying off about 20,000 of its 100,000 employees after the attacks. The airline also is trimming its daily schedule to 1,654 flights, down about 30 percent since the attacks, as of Oct. 31.
The Elk Grove Village, Ill.-based airline lost more than $700 million in the first half of the year – including as much as $116 million from the failed merger with US Airways, which Goodwin proposed last year. United was surpassed by American Airlines this year as the biggest U.S. airline.
UAL shares, which closed Tuesday at $15.50 on the New York Stock Exchange, have lost two-thirds of their value since January. They were at $73.50 before Goodwin's appointment on March 25, 1999.
Goodwin was the unexpected compromise choice to succeed retiring CEO Gerald Greenwald in 1999, getting the job after unions blocked the choice of Greenwald's hand-picked heir, United president John Edwardson.
It has been speculated that Greenwald – who headed UAL from 1994-99, a time of record profits and good labor-management relations – could return to replace Goodwin. Greenwald declined Monday through a spokeswoman to speak to a reporter.
[ 24 October 2001: Message edited by: Airbubba ]
_________________________________________
United Airlines Grapples With Crisis
By Dave Carpenter
AP Business Writer
Wednesday, Oct. 24, 2001; 9:23 a.m. EDT
CHICAGO –– Officials of United Airlines' parent company headed into a meeting Wednesday amid the worst crisis in company history – and an uproar over a letter from United chief executive James Goodwin that sent the airline's stock plunging.
United officials declined to say whether the UAL Corp. board of directors was considering replacing Goodwin, despite widespread industry speculation.
Two unions representing United employees called for his resignation and the company's stock fell more than 20 percent last week after Goodwin said in a letter to employees that the airline was hemorrhaging cash and "will perish" sometime next year if it doesn't stem huge losses that have worsened dramatically since the Sept. 11 terrorist attacks.
United union leaders accused Goodwin of panicking customers and workers unjustifiably, and questioned his dire assertions. They claim his remarks were made to get contracted employees to agree to lower wages, gain negotiating leverage or get more government assistance.
United already was in deep trouble before the attacks, severely hurt by a downturn in business travel – upon which it depends more heavily than other airlines – and the highest costs of any major U.S. carrier.
Analysts expect United to report a quarterly loss of close to $1 billion or more when it releases third-quarter results on Nov 1. Included in that total will be a hefty charge for the costs of laying off about 20,000 of its 100,000 employees after the attacks. The airline also is trimming its daily schedule to 1,654 flights, down about 30 percent since the attacks, as of Oct. 31.
The Elk Grove Village, Ill.-based airline lost more than $700 million in the first half of the year – including as much as $116 million from the failed merger with US Airways, which Goodwin proposed last year. United was surpassed by American Airlines this year as the biggest U.S. airline.
UAL shares, which closed Tuesday at $15.50 on the New York Stock Exchange, have lost two-thirds of their value since January. They were at $73.50 before Goodwin's appointment on March 25, 1999.
Goodwin was the unexpected compromise choice to succeed retiring CEO Gerald Greenwald in 1999, getting the job after unions blocked the choice of Greenwald's hand-picked heir, United president John Edwardson.
It has been speculated that Greenwald – who headed UAL from 1994-99, a time of record profits and good labor-management relations – could return to replace Goodwin. Greenwald declined Monday through a spokeswoman to speak to a reporter.
[ 24 October 2001: Message edited by: Airbubba ]
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BenThere
Problem with that idea here in NA is that the Unemployment Office considers this to be a voluntary lay-off i.e. "you quit your job". Result? No unemployment payments. The CAW (Canadian Auto Workers) had negotiated a "reverse seniority lay-off clause" in there contract and fortunately only a small minority of Air Canada employees were caught in this catch 22 situation.
Problem with that idea here in NA is that the Unemployment Office considers this to be a voluntary lay-off i.e. "you quit your job". Result? No unemployment payments. The CAW (Canadian Auto Workers) had negotiated a "reverse seniority lay-off clause" in there contract and fortunately only a small minority of Air Canada employees were caught in this catch 22 situation.
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Guys, guys. Lets look at the facts over the last 10 or so years by and large the airline industry has been riding high on the hog with the result that inept management has gone largly unoticed. It's not just at UAL, BA, Swissair, Sabena, the list goes on and on. Many of these "leaders" have taken strong companies and turned them into houses of cards which is ok on a calm day but look out, the wind just started to blow.
What's the solution? I'd say some pretty hard decisions are going to need to be made, ones that are bound to pi55 off a lot of folks (esp pilot groups). First up, scope, in any other business you'd call it restraint of trade. Its gotta go, and it will one way or another. Trading off routes to regionals, guess what? It's going to happen.
Seniority system? A system which simply dosent exsist in most other professions. What about skill and ability? (not only that but it ties individuals to a particular company limiting their chance to develop careers). It's gotta go.
Think all the above is bollocks? OK fine, but you watch if these icons go (as well they might) their places will be taken by others...Mesa, Xair, VLM and so on and so on.. Matter of fact I might start one myself (OH NOOOOOO Guvnor moment)
What's the solution? I'd say some pretty hard decisions are going to need to be made, ones that are bound to pi55 off a lot of folks (esp pilot groups). First up, scope, in any other business you'd call it restraint of trade. Its gotta go, and it will one way or another. Trading off routes to regionals, guess what? It's going to happen.
Seniority system? A system which simply dosent exsist in most other professions. What about skill and ability? (not only that but it ties individuals to a particular company limiting their chance to develop careers). It's gotta go.
Think all the above is bollocks? OK fine, but you watch if these icons go (as well they might) their places will be taken by others...Mesa, Xair, VLM and so on and so on.. Matter of fact I might start one myself (OH NOOOOOO Guvnor moment)
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UAL must not and will not go under.The pay rises in the past were not disproportionate but we have a new ball game today.Pilots must take voluntary pay cuts and save this great airline.
I dont agree senior pilots should take early retirement..they have lives too.But they must take the biggest cuts its true.
whatshouldiuse..pilots should never be rated on ability.All airlines suffer from favoritism/nepotism..the seniority list protects those who arent on the christmas card list of management/training.
I dont agree senior pilots should take early retirement..they have lives too.But they must take the biggest cuts its true.
whatshouldiuse..pilots should never be rated on ability.All airlines suffer from favoritism/nepotism..the seniority list protects those who arent on the christmas card list of management/training.
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I think there may be a hidden agenda in all this airline failure talk in that the people that own and control the big carriers are using the september 11th events to "reshuffle the deck of playing cards visa vi bankruptcy
filings to abrogate contracts with all its
deleterious effects on wages and working conditions.for those real senior guys at the largest carriers who think they are impervious to whats coming , you better think again, those low seniority numbers may not protect you like it has in the past. The present condition of the airlines is analogous in some ways to the unsinkable ship the Titanic
we know the people in stearage went first and ultimately the first class passengers on the bow, all suffering the same fate. Alpa national has to get much more proactive in this enviroment,Contingency plans need to be developed NOW !!! :
filings to abrogate contracts with all its
deleterious effects on wages and working conditions.for those real senior guys at the largest carriers who think they are impervious to whats coming , you better think again, those low seniority numbers may not protect you like it has in the past. The present condition of the airlines is analogous in some ways to the unsinkable ship the Titanic
we know the people in stearage went first and ultimately the first class passengers on the bow, all suffering the same fate. Alpa national has to get much more proactive in this enviroment,Contingency plans need to be developed NOW !!! :
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No matter how big a pay cut, it wont matter anyway in a situation like this. Everyone who is performing a professional job should get paid accordingly. Whats the percentage of crew cost vs total cost anyway? Barely makes a difference what a pilot earns.
We just have to get paid for what we deliver. And while the computer geeks continue to collect the big bucks while we are fighting jet lag, cosmic radiation, routine checks, medicals and terrorist threats we have to take pay cuts? I dont think so.
We just have to get paid for what we deliver. And while the computer geeks continue to collect the big bucks while we are fighting jet lag, cosmic radiation, routine checks, medicals and terrorist threats we have to take pay cuts? I dont think so.
A member of our MEC (Master Exec. council) told me in person that even a 15% pay cut would make little difference in the overall financial picture at this US airline.
I would be willing to accept a a pay cut-especially if it prevents a number of furloughs. Apparently, our company has not seriously sought pay concessions, but pilots near retirement are offered a 55-hour month with full benefits and no retirement penalty, while we are all limited on some planes to 75 hours per month.
I would be willing to accept a a pay cut-especially if it prevents a number of furloughs. Apparently, our company has not seriously sought pay concessions, but pilots near retirement are offered a 55-hour month with full benefits and no retirement penalty, while we are all limited on some planes to 75 hours per month.
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Most of my pilot friends at that I've talked to don't seem to have a huge problem with a pay concession IF they know it will go towards saving the company. What they are afraid of, and myself as well (IAM member) is that these paycuts will be used to purchase bizjets and websites, as opposed to saving any jobs, or pulling us out of our financial troubles. I know that ALPA, IAM, and AFA have all asked to see the books, and so far UAL managment (if u can call it that) has declined to show them to anyone. They seem to lack any plan, or vision.
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UAL will not go down the pan.
This is just another goodwin hamfisted try at trying to screw the employees, so he can make up for the squandered millions he wasted on his US Air deal and to help pay for his next f-up, the aquisition of a biz jet company.
As I said at the beginning, UAL will not go down, but only if we have a vote of no confidence and get somebody into that position who can do the job. (Greenwald ?)
And for those who champion the pay cut option. I think I would like to see the huge bonuses the top management awarded themselves given back first.
This is just another goodwin hamfisted try at trying to screw the employees, so he can make up for the squandered millions he wasted on his US Air deal and to help pay for his next f-up, the aquisition of a biz jet company.
As I said at the beginning, UAL will not go down, but only if we have a vote of no confidence and get somebody into that position who can do the job. (Greenwald ?)
And for those who champion the pay cut option. I think I would like to see the huge bonuses the top management awarded themselves given back first.
Hardly Never Not Unwilling
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Another idea -
Most of the majors' furlough anouncements are in the 10-15% range for pilots. My MEC has promoted, and gotten approved, an assessment of about 1% to cover our furloughed pilots' medical insurance. If, however, we raised the assessment to around 10%, we could easily provide furloughed pilots with about 60% of their pre-furlough income. This spreads the pain more equitably, secures loyalty, builds the brotherhood foundation - all of which to me are what ALPA should be about.
Most of the majors' furlough anouncements are in the 10-15% range for pilots. My MEC has promoted, and gotten approved, an assessment of about 1% to cover our furloughed pilots' medical insurance. If, however, we raised the assessment to around 10%, we could easily provide furloughed pilots with about 60% of their pre-furlough income. This spreads the pain more equitably, secures loyalty, builds the brotherhood foundation - all of which to me are what ALPA should be about.
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hey ben there....bout time somebody comes up with a good idea....sure would be nice to have these assesments written into contracts;;the downside being once again employees are paying for bad management practices 
