• NEGOTIATIONS UPDATE 
• PRESIDENT’S REPORT

NEGOTIATIONS UPDATE 

Initial proposals mailed to you in August were the starting point for this round of negotiations. The Company responded to our initial Term Sheet on August 18. The negotiating committee presented a counter to the Company’s August 18 proposal on September 3. Both of these new proposals will be posted on our Web Site within a few days. Our recent proposal is more detailed than our initial Term Sheet. It contains a seniority based reserve system and other provisions designed to achieve cost savings. It is our hope to minimize the demands to our W-2 earnings and our standard of living being made by management. The committee continues to stress to management simply reducing our pay and benefits is not the answer to the problems of US Airways. Negotiating is a process. Until the end, any line or section in a proposal should not be viewed as final. Everything in our contract has value and nothing is going to be offered that we do not receive credit for. It is a fact that things are going to change. Industry pressures demand that both management and labor adjust to the environment. I certainly take exception to this management’s constant refrain that labor is slow to react to the new environment. Rather, I remind them that it is labor that has actively reduced costs over the past two years. Only now are we seeing any real movement on management’s part to reduce “company costs” or increase revenue. I encourage you to visit our web site to receive timely updates. I will be putting a hard copy of this E-Line in mail files this week. If you have not already done so please enroll in the CLT E-Line on the CLT page of the AFA US Airways web site. 


PRESIDENT’S REPORT 

I have now been in office as your President for two months. It has been interesting to say the least. My involvement with the current negotiations began in May when the MEC met with the Company to view the “Transformation Plan”. I attended the MEC meetings in June prior to taking office July 1. On July 9 the MEC met with CEO Bruce Lakefield and VP Bruce Ashby. At that meeting the two officers told us their view of the state of the industry and of the Company. The MEC expressed ours. I told both men my support for their plan would be dependent on their promises of change in the corporate culture at US Airways. While all agreed the industry was changing before our eyes and the costs at US Airways needed to be reduced, it was not going to be based solely on the backs of labor. After considerable discussion and thought the MEC voted later that month to enter in negotiations with the Company. It was stressed to the Company that we would look for cost savings within our contract. Over the last few weeks the MEC has met with the negotiating committee to hear their reports and provide our input. By the content of their proposals it is apparent the Company is simply trying to reach a dollar figure reduction without real “cost savings” or improvements to our system. We will continue to hold to our belief that solely reducing wages and benefits will not help the Company in the long run. It is no secret to any of us that the future of US Airways and other legacy carriers is in doubt. United remains in bankruptcy and Delta is on the verge of filing for protection. Other airlines will have to consider protection in the future as way to lower costs and become “competitive”. Rather than compete in the traditional sense through revenue growth and efficiency airlines are using the bankruptcy court as their tool to success. A GAO report presented to Congress in August stated simply, “Legacy carriers must reduce their costs survive.” While the report listed labor as a major cost, it did not say labor is the only cost that needs to be reduced. Like an ocean liner Legacy airlines are slow to change course. They will not change any faster by throwing their employees overboard. Unfortunately for us, management thinks that is the answer. Financial “talent” appears to be driving the ship here at US Airways. For example, while operational people believe the LTO reserve system causes problems the finance people use a different indicator. They produce numbers showing the amount of “under guarantee pay” is now lower than before. Voila, cost savings! No one bothers to add up the costs associated with running out of coverage, splitting trips or demoralizing one third of the seniority list. That is the problem with bean counters. They know the COST of everything but the VALUE of nothing. I will get off my soap box now. 

On the Local level I have had two months in the office to see the day to day issues our members face. Part of our job at the local level is to administer our contract and make sure you are treated fairly by the Company in matters involving discipline, scheduling and working conditions. Your officers try to answer your questions and concerns as directly as possible. Our office hours officially are M-F 9am to 5pm. I can assure you we all work more than that. My cell phone is available for you to use. I simply ask you to use discretion when calling it. While every issue is important to us, simple time constraints may dictate the timeliness of our response. While I wish we had the resources to provide 24/7 service the reality is we do not. A base of our size requires prioritization of our time to ensure the best possible use of your union dues. 

Our dues are divided up among the various levels of our union structure. At the local level we receive 16% of each member’s $39.00 monthly dues. The MEC level receives a percentage as well as the International Office. Prior to my election I did not have a very clear understanding of what AFA does with our money. Since being elected I have begun to see the costs associated with the many programs AFA provides on national level for all members. While there is always room for improvement in spending and asset allocation but I assure you I believe our $39.00 is well spent. 

Or local budget is approximately $9700 per month. 16% of $39.00 is $6.24 times 1575 active members. Our fixed expenditures include office rent, telephone and internet, AFL-CIO monthly dues, postage, office supplies and Flight Pay Loss (FPL) for Officers and Committee members. Other costs such as network computer support, committee work and member support (flowers, donations, etc.) vary on a monthly basis. I am making adjustments to our fixed costs to give the council more working capital. I have consolidated our phone bills and am exploring cheaper office space in an effort to provide the budget with more resources. A base this size requires an office. The volume of files, resource materials and equipment will not fit in my spare room. The amount of calls we receive on a typical day would overwhelm a second phone line in anyone’s home. The inability of officers to be in direct contact would not serve you well at all. 

Our contract provides Council 89 with 103 hours of FPL from the Company. Any additional FPL for Officers or committee members comes out of the local budget. For each hour of FPL paid by the local we must pay the Company and additional 26% to cover benefit costs. For example, if we pay a committee member 10 hours of FPL for committee work the cost to our budget is actually 12.6 hours of pay. Neither your VP nor Sec. works in the office full time as the budget will not support it. 

For the time being most committee work remains voluntary. Over time I hope that will change. We have open positions on several committees and can always use help on others. Anyone who is interested in working on a committee can contact me with their interests and qualifications. Committee chairs will be selected by your officers based on ability. 

Please continue to do your jobs as safely and well as you can. Please call our office with your concerns and input. 

Thanks You, 

Mike Flores 

MIKE FLORES
LEC PRESIDENT
COUNCIL 89
MFlores@afausairways.org
AFA-CWA AFL-CIO
704-527-0325 OFFICE
704-576-3174 CELL

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