UAL on Deathwatch
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Labor peace and tranquility had fallen apart many moons ago. It has never been forgotten that in the mid 80's a strike had employed many scabs. Even today, the lingering presence of these low lifers continues to poison the pilot group. It was also the era of the A & B pay scales.
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>>Aibubba, I'm just pointing out one if the reasons for their malaise, it's not the crucial reason and obviously the carriers you mentioned have fare better, but you can't tell me AA's swallowing of TWA has been all sweetness and light!<<
Yep, looks like you were thinking of AA instead of UAL...
Yep, looks like you were thinking of AA instead of UAL...
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>>It is said that guru Tilton and his family's "temporary" accommodation at the Four Season's Hotel at downtown Chicago (not near the airport nor near UAL's World Headquarters) are costing the company $18,000 per month...Not to mention Tilton's $950,000 annual salary, plus $3 Million "signing" bonus, plus $4.8 Million compensation for lost pension benefits at his former employer, plus entitlements to "future" bonuses, including 200% of his "base" salary. <<
Looks like the judge has OK'ed Tilton's pay package, let's see what he approves for the pilots on March 15...
___________________________________
Bankruptcy Judge Clears
United CEO's Pay Package
Associated Press
CHICAGO -- A bankruptcy judge allowed United Airlines to go ahead Friday with its multimillion-dollar pay package for Chief Executive Glenn Tilton, despite acknowledging that the timing may send a questionable message to employees.
Judge Eugene Wedoff said rejecting the company's bid for prompt adoption of the compensation package in bankruptcy would have raised questions about the court's confidence in the carrier's restructuring. He said the financial impact on UAL Corp.'s United should be comparatively negligible.
The Association of Flight Attendants contested Mr. Tilton's five-year contract as premature and unfair, given that United employees have taken interim pay cuts and are being asked for longer-term concessions. The flight attendants argued that, instead of stating full confidence in its CEO, United should send a message of shared sacrifice by revising or delaying the plan. To that argument, Judge Wedoff responded: "You may be right." The flight attendants said Mr. Tilton's compensation should be tied to the success of the company's restructuring.
United said the original $11.4 million pay and benefits package for Mr. Tilton -- the terms of which were lowered somewhat this week -- was "eminently reasonable" and even below market average for a company its size. Mr. Tilton got a $3 million signing bonus last September as part of a package that also included an annual salary of $950,000, $4.5 million in pension benefits, 1.15 million stock options in parent UAL, and relocation expenses.
The chairman and CEO volunteered early in United's 10-week-old bankruptcy reorganization to take an 11% pay cut, which would lower this salary to $845,500 if adopted. United didn't immediately disclose the terms of the revised package.
A spokeswoman for the flight attendants' union, Sara Nelson Dela Cruz, said the group remains fully committed to United's success "regardless of whether we agree with the judge's decision." She said the judge will have an opportunity to "balance" his decision on CEO compensation with that of employee wages when renegotiated contracts come before the court.
Judge Wedoff also sided with the company Friday in extending the ban on further sales of employee-owned stock in the airline. After hearing arguments from both United and the independent trustee for its employee stock ownership plan, State Street Bank & Trust Co., he said he would issue a new injunction blocking the sale.
United will lose what could amount to a billion-dollar tax writeoff if employee ownership falls below the 20% level it's at now.
State Street argued that employees' 12 million remaining shares could be worthless if not allowed to be sold soon. Its attorneys called United's plan for a low-cost carrier at the heart of its restructuring strategy "more an exercise in hope than in reality."
But Judge Wedoff said the tax benefit could have "very substantial significance" as an element of United's restructuring. He said employees can benefit more from a revived United than from cashing in their remaining shares, which at current value are worth about $13 million -- an average of about $170 for each of 75,000 participants, based on the company's figures.
Updated February 21, 2003 9:19 p.m. EST
Looks like the judge has OK'ed Tilton's pay package, let's see what he approves for the pilots on March 15...
___________________________________
Bankruptcy Judge Clears
United CEO's Pay Package
Associated Press
CHICAGO -- A bankruptcy judge allowed United Airlines to go ahead Friday with its multimillion-dollar pay package for Chief Executive Glenn Tilton, despite acknowledging that the timing may send a questionable message to employees.
Judge Eugene Wedoff said rejecting the company's bid for prompt adoption of the compensation package in bankruptcy would have raised questions about the court's confidence in the carrier's restructuring. He said the financial impact on UAL Corp.'s United should be comparatively negligible.
The Association of Flight Attendants contested Mr. Tilton's five-year contract as premature and unfair, given that United employees have taken interim pay cuts and are being asked for longer-term concessions. The flight attendants argued that, instead of stating full confidence in its CEO, United should send a message of shared sacrifice by revising or delaying the plan. To that argument, Judge Wedoff responded: "You may be right." The flight attendants said Mr. Tilton's compensation should be tied to the success of the company's restructuring.
United said the original $11.4 million pay and benefits package for Mr. Tilton -- the terms of which were lowered somewhat this week -- was "eminently reasonable" and even below market average for a company its size. Mr. Tilton got a $3 million signing bonus last September as part of a package that also included an annual salary of $950,000, $4.5 million in pension benefits, 1.15 million stock options in parent UAL, and relocation expenses.
The chairman and CEO volunteered early in United's 10-week-old bankruptcy reorganization to take an 11% pay cut, which would lower this salary to $845,500 if adopted. United didn't immediately disclose the terms of the revised package.
A spokeswoman for the flight attendants' union, Sara Nelson Dela Cruz, said the group remains fully committed to United's success "regardless of whether we agree with the judge's decision." She said the judge will have an opportunity to "balance" his decision on CEO compensation with that of employee wages when renegotiated contracts come before the court.
Judge Wedoff also sided with the company Friday in extending the ban on further sales of employee-owned stock in the airline. After hearing arguments from both United and the independent trustee for its employee stock ownership plan, State Street Bank & Trust Co., he said he would issue a new injunction blocking the sale.
United will lose what could amount to a billion-dollar tax writeoff if employee ownership falls below the 20% level it's at now.
State Street argued that employees' 12 million remaining shares could be worthless if not allowed to be sold soon. Its attorneys called United's plan for a low-cost carrier at the heart of its restructuring strategy "more an exercise in hope than in reality."
But Judge Wedoff said the tax benefit could have "very substantial significance" as an element of United's restructuring. He said employees can benefit more from a revived United than from cashing in their remaining shares, which at current value are worth about $13 million -- an average of about $170 for each of 75,000 participants, based on the company's figures.
Updated February 21, 2003 9:19 p.m. EST
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A recent family experience illustrated to me some of UAL's secondary problems. Adult daughter got prices for 6 month trip, YVR to BKK. Equally price for UAL and EVA. She decided to go with EVA, whom she had never heard of.
Reasons,
1 "Why would I go thru the aggravation of paranoid US security and INS at the connecting airport?
2 US airline is more likely to attract terrorism and
3 Will they be in business for my return trip?"
Sad really!
Reasons,
1 "Why would I go thru the aggravation of paranoid US security and INS at the connecting airport?
2 US airline is more likely to attract terrorism and
3 Will they be in business for my return trip?"
Sad really!
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Mr. Tilton's Income
Mr. Tilton is costing UAL something like $15k to $25k a day, it you count all the perks against this one year. That is a small fraction of the $9 million they lose each day. Most of us would be happy with that kind of pay, BUT ....
UAL was unable to attract a person with good airline experience for that kind of money - given that the company is likely to fail leaving a black mark on their resume. How many people will take a job that is very likely to hurt their future employment possibilites?
UAL was unable to attract a person with good airline experience for that kind of money - given that the company is likely to fail leaving a black mark on their resume. How many people will take a job that is very likely to hurt their future employment possibilites?
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OneWorld22---
You are correct in your statement about TWA/AA being less than sweet; far from it actually. In UA's case, the last real merger they had was with Capital Airways in 1960. Over the years, they've acquired various assets and routes, such as PA routes to the far east in '85 and LHR-USA routes in '91, but no real mergers.
As far as AA/TWA, AA has furloughed 42% of TWA's pilots (up to 8 years seniority), and 50% of TWA's F/As (up to 25 years seniority). AA has only furloughed 3% of their own F/As and 4% of their own pilots, an obvious disparity. AA Pilots & F/As with only 1 or 2 years of service stay, while many TWA workers with 9,15,25 years get laid-off. Not exactly 'sweet and kindly' treatment by any means, is it?
As far as AA/TWA, AA has furloughed 42% of TWA's pilots (up to 8 years seniority), and 50% of TWA's F/As (up to 25 years seniority). AA has only furloughed 3% of their own F/As and 4% of their own pilots, an obvious disparity. AA Pilots & F/As with only 1 or 2 years of service stay, while many TWA workers with 9,15,25 years get laid-off. Not exactly 'sweet and kindly' treatment by any means, is it?
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OTOH, considering the state TWA was in, the folks that were there are lucky to have jobs at all...the ones that remain that is...
The folks on the outside, will REMAIN on the outside for a very long time.
The folks on the outside, will REMAIN on the outside for a very long time.
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"The state TWA was in"?
You mean the 'state' AA, UA and US are in RIGHT NOW? AA will be the next victim to join other bankrupt US carriers, so what then?
Nobody has a sense of entitlement here, 411A, and nobody knows how their career will turn out until they hit age 60.
AA's current stock rice, $2.90 per share, amounts to a market cap that is LESS than the $750 million AA paid for TWA. Nothing gives AA the right to furlough only TWA people and not junior, new-hire AA people.
You mean the 'state' AA, UA and US are in RIGHT NOW? AA will be the next victim to join other bankrupt US carriers, so what then?
Nobody has a sense of entitlement here, 411A, and nobody knows how their career will turn out until they hit age 60.
AA's current stock rice, $2.90 per share, amounts to a market cap that is LESS than the $750 million AA paid for TWA. Nothing gives AA the right to furlough only TWA people and not junior, new-hire AA people.
767 300 ER hit the nail on the head. I've wondered how the AA Pilot Merger Committee justified (other than doing an excellent job protecting the original AA pilots' jobs) such a staple of seniority lists (despite protecting some senior TWA pilots), except by using these two rationalizations;
1) TWA might not have survived more than a short while.
2) Almost blaming TWA's problems on the TWA pilots, who had for years, reduced their own salaries by 40%, in order to repair crippling cash-flow damage which was inflicted on the operation by former owner Icahn and his attorneys-all of whom had no scruples or business integrity, whatsoever. But when did Ubermenschen ever take pity on the Untermenschen: "Arbeit Macht Frei".
Using the AA Merger Committee's (who somehow also deserved to have the views of Owner-Ubermenschen, as they gazed down to their fellow pilots....) logic before 9/11, they are (or were) entitled to a self-righteous, unashamed attitude because they previously WERE a relatively healthy airline. Ironically, TWA's Merger Committee, partly due to strong impatience and pressure on the part of Icahn for quick merger results, did a somewhat similar thing to Ozark Airlines in the 90s, which consisted of DC-9s.
1) TWA might not have survived more than a short while.
2) Almost blaming TWA's problems on the TWA pilots, who had for years, reduced their own salaries by 40%, in order to repair crippling cash-flow damage which was inflicted on the operation by former owner Icahn and his attorneys-all of whom had no scruples or business integrity, whatsoever. But when did Ubermenschen ever take pity on the Untermenschen: "Arbeit Macht Frei".
Using the AA Merger Committee's (who somehow also deserved to have the views of Owner-Ubermenschen, as they gazed down to their fellow pilots....) logic before 9/11, they are (or were) entitled to a self-righteous, unashamed attitude because they previously WERE a relatively healthy airline. Ironically, TWA's Merger Committee, partly due to strong impatience and pressure on the part of Icahn for quick merger results, did a somewhat similar thing to Ozark Airlines in the 90s, which consisted of DC-9s.
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B767300ER,
The AA crews I talked with at LHR were absolutely stunned when AA management announced the buyout of the 3X BK'ed TWA. All they wanted to know was why. It made absolutely no sense at all. Now in hindsight, it may be the final straw that breaks AA's back.
The AA crews I talked with at LHR were absolutely stunned when AA management announced the buyout of the 3X BK'ed TWA. All they wanted to know was why. It made absolutely no sense at all. Now in hindsight, it may be the final straw that breaks AA's back.
Hardly Never Not Unwilling
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I think I can trace the inception UAL's problem back to 1994 when they failed to grant me an interview when I had 2,000 hours heavyjet PIC, and another 500 instructor hours. They hired a female colleague I had tried to train with 600 hours who never would learn to fly. I went elsewhere. They lost my contribution (thank God), and I suspect this type of logic led to other missteps company-wide.
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Ignition Override: Thanks for your comments. One error, though, and it is a very popular misconception: Ozark pilots, numbering 500+ or so flying only DC-9/MD80s, were NOT stapled. They were ALL given their DATE-OF-HIRE, for pay and bidding purposes. They were also restricted from bidding B-747/767/L1011 as Captain for a short while, for obvious reasons, and then allowed to bid 16% of the Captain bids until the last OZ pilot could hold Wide-Body Captain. This TWA/OZ merger did NOT result in the overwhelming furlough of more than half of the OZ pilots, nor the loss of any seats/bids/routes or domiciles they brought to the marraige. AA has taken EVERYTHING TWA brought for themselves, and furloughed 65% of TWA's employees. Not in any way, shape or form comparable to TWA/OZ.
About AA pilots being amazed at purchasing TWA, if it was'nt for that buyout, over 2000 of AA's pilots would have been laid-off; right now, only 386 out of 11,200 have been. They should count their lucky stars AA bought TWA, or thousands of their employees would be on the street.
About AA pilots being amazed at purchasing TWA, if it was'nt for that buyout, over 2000 of AA's pilots would have been laid-off; right now, only 386 out of 11,200 have been. They should count their lucky stars AA bought TWA, or thousands of their employees would be on the street.
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Oh trust me B767300ER we to a man would have rather seen TWA die a natural death and take our chances with lady luck vs. having this TWA albatross around our neck.
It doesn’t take a Harvard MBA to know it is better to have money in the bank then have another anchor on a sinking ship. Under the current conditions I’ll take more cash, less planes, one less hub, and one less airline to share the sky with.
It doesn’t take a Harvard MBA to know it is better to have money in the bank then have another anchor on a sinking ship. Under the current conditions I’ll take more cash, less planes, one less hub, and one less airline to share the sky with.
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>>They hired a female colleague I had tried to train with 600 hours who never would learn to fly. I went elsewhere. They lost my contribution (thank God), and I suspect this type of logic led to other missteps company-wide.<<
Well, in fairness to UAL, they were under a court ordered EEOC settlement for many years that required "affimative action" since the pilot force lacked "diversity". As practiced in the U.S., diversity implies people other than straight European males of non-hispanic origin. Every major airline has a diversity comittee of some form and has an obligatory statement of a commitment to diversity and preference for diverse suppliers, for example:
http://www.ual.com/page/article/0,,1365,00.html
http://www.ual.com/page/middlepage/0,1454,50126,00.html
http://www.aacareers.com/diversity.htm
http://www.nwa.com/corpinfo/profi/supplier.shtml/
UAL had a double quota system, if five percent of their applicants were female, they had to hire ten percent until the overall pilot force was five percent. After a decade or so the requirements were met and the court order was lifted.
Diversity is still a somewhat novel concept in Europe but like a lot of things that start in the U.S. (e.g. alcohol testing, locked cockpit doors) it is starting to come ashore.
Well, in fairness to UAL, they were under a court ordered EEOC settlement for many years that required "affimative action" since the pilot force lacked "diversity". As practiced in the U.S., diversity implies people other than straight European males of non-hispanic origin. Every major airline has a diversity comittee of some form and has an obligatory statement of a commitment to diversity and preference for diverse suppliers, for example:
http://www.ual.com/page/article/0,,1365,00.html
http://www.ual.com/page/middlepage/0,1454,50126,00.html
http://www.aacareers.com/diversity.htm
http://www.nwa.com/corpinfo/profi/supplier.shtml/
UAL had a double quota system, if five percent of their applicants were female, they had to hire ten percent until the overall pilot force was five percent. After a decade or so the requirements were met and the court order was lifted.
Diversity is still a somewhat novel concept in Europe but like a lot of things that start in the U.S. (e.g. alcohol testing, locked cockpit doors) it is starting to come ashore.
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Looking at it as an outsider
Whilst not able to respond directly to this forum, I feel that I may also be able to add some alternative input.
Having been employed as a Corporate travel agent for over 30 years - that must be approaching a record! - I am amazed at the lack of expertise shown by UAL's reservations staff in Europe. Calls from the UK are put through to a call centre in Ireland, and taken by staff who appear only able to answer a question that the computer is programmed to serve. As happens with so many companies, they go for a 'call centre enviroment' where staff with no deep knowledge of the product are employed in order to take as many calls as quickly as a windows driven system will process.
Ask any questions with regards to fares and other intricate matters and you will be asked to hold, for more than a few minutes, and then fed an answer to your question. The answer has obviously come from a 3rd party, because if you then query the response you are again placed on hold yet again and the whole process is repeated. At no time are you able to speak to anybody with experience.
The end result of this is that traffic is being directed away from UAL to those airlines who are able to give a proper and accurate answer within a short timescale. To take 45 minutes to arrange a ticket on departure for a 5-sector itinerary is an embarressment to UAL and a definate turn-off for any agent.
I hope for the sake of everybody that UAL do survive, but I also hope that they will be fully supported by experienced staff in all departments. This will go a long way to rebuild confidence in the product.
Thank you for allowing me to have my rant and I now, as a 'professional on the ground', hand back over to the 'professionals in the air'.
Scottie Dog
Having been employed as a Corporate travel agent for over 30 years - that must be approaching a record! - I am amazed at the lack of expertise shown by UAL's reservations staff in Europe. Calls from the UK are put through to a call centre in Ireland, and taken by staff who appear only able to answer a question that the computer is programmed to serve. As happens with so many companies, they go for a 'call centre enviroment' where staff with no deep knowledge of the product are employed in order to take as many calls as quickly as a windows driven system will process.
Ask any questions with regards to fares and other intricate matters and you will be asked to hold, for more than a few minutes, and then fed an answer to your question. The answer has obviously come from a 3rd party, because if you then query the response you are again placed on hold yet again and the whole process is repeated. At no time are you able to speak to anybody with experience.
The end result of this is that traffic is being directed away from UAL to those airlines who are able to give a proper and accurate answer within a short timescale. To take 45 minutes to arrange a ticket on departure for a 5-sector itinerary is an embarressment to UAL and a definate turn-off for any agent.
I hope for the sake of everybody that UAL do survive, but I also hope that they will be fully supported by experienced staff in all departments. This will go a long way to rebuild confidence in the product.
Thank you for allowing me to have my rant and I now, as a 'professional on the ground', hand back over to the 'professionals in the air'.
Scottie Dog
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767-300errrrr:
what utter hogwash, and you know it....
the reports I've seen by financial institutions unrelated to this fiasco indicate that all the purchase of TWA did for AA was to saddle it with an extra 2 billion in debt, and require an immediate 1 billion goodwill write-off. Not remotely like the Ozark situation, as you say....
PS. Why did AA have over 500 TWA applicants on file prior to the purchase, if TWA was doing so splendidly; why were those applicants happy to start at the bottom of the seniority list if they'd been called for interview? Hmmmmm....
You must think the European readers of this were born yesterday.
what utter hogwash, and you know it....
the reports I've seen by financial institutions unrelated to this fiasco indicate that all the purchase of TWA did for AA was to saddle it with an extra 2 billion in debt, and require an immediate 1 billion goodwill write-off. Not remotely like the Ozark situation, as you say....
PS. Why did AA have over 500 TWA applicants on file prior to the purchase, if TWA was doing so splendidly; why were those applicants happy to start at the bottom of the seniority list if they'd been called for interview? Hmmmmm....
You must think the European readers of this were born yesterday.
B767300ER: Pardon my faulty memory about the Ozark merger. I had forgotten the basic situation about the use of date-of-hire etc. My "good friend" who was with TWA (who acknowledged the rough deal for so many Ozark pilots) retired there about eight years ago.
Without the 9/11 catastrophe, could AA have digested TWA?
Although I should have admitted this, I can somewhat understand the AA Merger Committee's view, i.e., that any fairly secure future jobs for TWA pilots with a major airline could be considered very fortunate. But in my opinion, it would have still made me a bit uncomfortable to have used that as the main rationale for certain arbitration scenarios, were I to have had any input.
acb4u: out of respect for the United employees, it would be nice if the title of this topic could be more tactful than the crude phrase "deathwatch", as if it were the very old Frankish king Charlemagne in the Dark Ages.
Without the 9/11 catastrophe, could AA have digested TWA?
Although I should have admitted this, I can somewhat understand the AA Merger Committee's view, i.e., that any fairly secure future jobs for TWA pilots with a major airline could be considered very fortunate. But in my opinion, it would have still made me a bit uncomfortable to have used that as the main rationale for certain arbitration scenarios, were I to have had any input.
acb4u: out of respect for the United employees, it would be nice if the title of this topic could be more tactful than the crude phrase "deathwatch", as if it were the very old Frankish king Charlemagne in the Dark Ages.
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Affirmative action not only hurt the pilot's group but all departments of UAL. To ignore the best qualifed and productive applicant and be forced to hire second rate and lower just because of political correctness is going to cost big time.
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The end of the gravy train...
Notice that the American Airlines pilots' union (APA) has rejected a report indicating that AA will file for bankruptcy in May...and Northwest has told their ALPA pilots that wages and benefits/pensions could well be rolled back to 1996 levels.
Would expect many are still in a severe state of denial, but will have to face the music at some point...there is a sea change taking place in the airline industry in the USA, make no mistake.
Tough times ahead for many...management certainly included.
Would expect many are still in a severe state of denial, but will have to face the music at some point...there is a sea change taking place in the airline industry in the USA, make no mistake.
Tough times ahead for many...management certainly included.
Notice that the American Airlines pilots' union (APA) has rejected a report indicating that AA will file for bankruptcy in May...
411A
411A
There was no "report" 411A. The paper somehow came across a private email from the local DFW rep sent to the members of his base. These were the thoughts of this rep only. He doesn't know any more than what is publicly known already, which I'll agree isn't good to say the least.
Most of my fellow AA pilots are not in any state of denial 411A. Any group this large will still have a vocal few though, which is not suprising since some always are, like in your case where you think FO's like flying with you.