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October 29, 2004 |
BANKRUPTCY UPDATE
The negotiating committee is presenting a counter proposal to the Company’s October 20 proposal this afternoon. The counter proposal will be published on the MEC web site after it has been presented. The Company’s last proposal would effectively transform a career into a low paying temporary job for most of us. It is the position of this MEC to continue to try to counter that effort. It is one thing to take concessions to save the airline; it is another to agree to the complete destruction of our careers and everything we have worked for.
The Company has stated that absent "consensual labor agreements" by mid November they will file an 1113c motion in court to seek the abrogation of our contract. Such a motion would trigger a further round of negotiations, court hearings and ultimately a decision by the court. The court can decide to abrogate our contract in full or in part. The Court could than impose a contract on a labor group of its choosing. It is our intent to continue negotiating with the Company in an effort to avoid a court imposed settlement.
While the Court did find for the Company regarding the emergency relief order, granting a 21% pay cut and increasing the monthly flying obligation, it did so under different guidelines than would exist under section 1113c. Whereas the emergency relief order (21% pay cut) only required the Company to show that without it "irreparable harm" would be done, the Company would now have to show that it had "bargained in good faith" and that the employees rejected a proposal "without good cause" in order for the Court to abrogate our contract.
The biggest impediment to a "consensual" agreement to date has been the disposition of our pension. The $116 million cost saving target the Company proposed to AFA in July included reductions in pay, benefits, work rules, pension and retiree medical benefits. The termination or freezing of our pension was included in the target amount. Since filing for bankruptcy US Airways has stated that they intend to seek to terminate our pension and "significantly reduce" our retiree medical benefits. While we obviously oppose that we are aware the Court may allow that to happen. A termination of the pension would save the Company over $50 million annually. Retiree medical savings are estimated by the Company at $10 million annually. The only problem is the Company does not want to apply those savings to our target. In short they want $116 million dollars in savings AND be able to terminate the pension AND eliminate retiree medical benefits. Doing all this would save the Company roughly 40% of the annual F/A payroll/benefit costs of $335 million. While the Court is there to protect the assets and the stockholders, the Company still would have to prove this is all necessary to ensure an emergence from bankruptcy.
Understandably this is trying time for all of us. We all want this behind us and for the airline and the employees to survive. You have elected us to represent you in the best way possible. I believe that way is to keep negotiating with the Company. At some point it will end though. There will reach a time when each of us will have to decide on our futures.
INCREASED MONTHLY FLYING OBLIGATIONS
The Company has announced today that staffing levels will be at a deficit for November in CLT, CLW, DCA, LGA, and PHL. As a result monthly flying obligations will be increased by 5 hours/1 ITD trip for those bases. Please remember that AFA did not agree to this change; it was imposed by the Court. AFA has pointed out to the Company the inequities and hardships this causes. We realize this severely impacts reserves and high option flyers who are either not breaking guarantee or getting to their option maximum. Unfortunately we can not file a grievance with the Court. The Company and the Court are thus requiring:
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50/55 hour option Fly between 55 and 60 hours
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70/75 hour option Fly between 75 and 80 hours
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90/95 hour option Fly between 95 and 100 hours
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100/105 hour option Fly between 105 and 110 hours
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ITD 4 Trip option Fly 5 trips
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ITD 5 Trip option Fly 6 trips
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ITD 6 Trip option Fly 7 trips
Obviously these are the worst of times for us and the industry. Hard as it may be, I urge all of you to keep flying as professionally and safely as possible. While our dedication to this Company is surely being tested our dedication to ourselves and our passengers should remain strong.
Thank you,
Mike Flores
LEC President Council 89
AFA-CWA AFL-CIO
704-527-0325 OFFICE
704-576-3174 CELL
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