Thread: Lacking union concessions, American Airlines files for bankruptcy

When will this downward spiral end?

It's not that rare, or game ending (ala Pan Am), for an airline company to declare bankruptcy.

I left American Airlines about 3 years ago to go back full-time military. That place has been a constant stress-pool of worry and division. Every day you wonder if your job will still be there.

The Unions and Management have long developed a culture of "class warefare" that (ultimately) will cost both sides dearly.

It saddens me to see this happen but, it wasn't unexpected.

That has been coming for a long time. I am very surprised it took that long. Now the question is how will the restructure. I have a buddy that flies for Eagle. I wonder if they will cut ties with eagle, since they do not do a lot of flights.

Originally Posted by Boomer182

That has been coming for a long time. I am very surprised it took that long. Now the question is how will the restructure. I have a buddy that flies for Eagle. I wonder if they will cut ties with eagle, since they do not do a lot of flights.

There was actually talks a few years ago... Eagle wanted to split off because it was the only branch that remained solvent.

Originally Posted by Witmaster

There was actually talks a few years ago... Eagle wanted to split off because it was the only branch that remained solvent.

I remember him briefly talking about that, but nothing ever came about I guess. I just wonder if they will now.

Any union advocate that things a $90K plus a year pension is fare can lick my balls. I am sure he earned a pension/retirement, but that is beyond excessive. Something reasonable from both sides is needed, Continental managed to survive and its workers are happy. I know this, I ask all the time when I fly and they say their contracts aren't perfect but they aren't getting screwed either.

The unions can work but the airlines need to work with them and work rules need to be changed.

Originally Posted by Boomer182

I remember him briefly talking about that, but nothing ever came about I guess. I just wonder if they will now.

If I was Eagle I sure as hell would. Not that I have any desire to see American completely fold, it just makes good business sense.

As far as American, it's gonna be ugly. They have a SHITLOAD of aged MD-80 aircraft that cost BILLIONS to maintain. If they shed that fleet, the need for thier large maintenance facilities will diminish. The fallout will result in pilots and flight attendants losing thier jobs as well as the massive maintenance hubs at Tulsa and Alliance Ft. Worth.

Of course, this is all going to take some time to iron out but ultimately, I can''t help but remember the fate of the TWA employees when American bought them out. It's gonna be ugly on a massive scale.

Originally Posted by Witmaster

If I was Eagle I sure as hell would. Not that I have any desire to see American completely fold, it just makes good business sense.

As far as American, it's gonna be ugly. They have a SHITLOAD of aged MD-80 aircraft that cost BILLIONS to maintain. If they shed that fleet, the need for thier large maintenance facilities will diminish. The fallout will result in pilots and flight attendants losing thier jobs as well as the massive maintenance hubs at Tulsa and Alliance Ft. Worth.

Of course, this is all going to take some time to iron out but ultimately, I can''t help but remember the fate of the TWA employees when American bought them out. It's gonna be ugly on a massive scale.

I agree, We use DFW to fly out of. Its going to be ugly, but at least we are not bailing them out. I have to give them that.

Originally Posted by oufinny

The unions can work but the airlines need to work with them and work rules need to be changed.

Well said, but it works both ways. Believe me... I've seen the "Union Solidarity" at work. Work is "paced" out to ensure overtime. 2-hour lunches disguised as "crew meetings" and sometime just deliberate malingering to "stick it in management's ass."

I've seen pilots get pissed over silly arguments AT THE GATE and walk straight to a phone, call in sick, and walk away from the aircraft leaving hundreds of passengers stranded until a reserve pilot can be located.

I've seen the days when Management squandered hundreds of thousands of dollars on PARTYS in the name of "employee recognition".

I've participated in "collaborative working groups" where Management and Union reps joined at the table to collectively come up with solutions... only to see MILLIONS be spent in a fruitless effort because either side just can't seem to agree.

Sure... the Unions can work... but WILL THEY? Sure... Management can "change rules" but WILL THEY?

Either way... it's too little-too late. The courts will now decide how to divide up the assets and obliterate the waste. My hope is that when the dust settles, whoever is left can put aside the petty differences and work together rather than hedging up and pointing fingers in blame.

We'll see.

Originally Posted by Witmaster

If I was Eagle I sure as hell would. Not that I have any desire to see American completely fold, it just makes good business sense.

As far as American, it's gonna be ugly. They have a SHITLOAD of aged MD-80 aircraft that cost BILLIONS to maintain. If they shed that fleet, the need for thier large maintenance facilities will diminish. The fallout will result in pilots and flight attendants losing thier jobs as well as the massive maintenance hubs at Tulsa and Alliance Ft. Worth.

Of course, this is all going to take some time to iron out but ultimately, I can''t help but remember the fate of the TWA employees when American bought them out. It's gonna be ugly on a massive scale.

Like United, AA has the oldest fleet in the industry. Same reason why Continental was bought by United, UA could not afford to modernize the fleet and it would take too long anyways. AA I knew was headed into bankruptcy, it was a black mark on Chicago just like United was when I lived there, always putting the union first. I can't tell you how many times I saw shit go down at O'Hare that made my head spin from either AA or UA employees, they didn't give a FUCK about the passengers that paid the bills.

Why always attack people at the bottom? It is people on the top who take outrageous amount of bonus (more then their paycheck) and paycheck, and that is making them go out of business. They should get rid of this ridiculuos practice and cut the paycheck and benifit of those pigs. This will solve the whole problems. People at the bottom are already making the lowest.

Originally Posted by Chubby

Why always attack people at the bottom? It is people on the top who take outrageous amount of bonus (more then their paycheck) and paycheck, and that is making them go out of business. They should get rid of this ridiculuos practice and cut the paycheck and benifit of those pigs. This will solve the whole problems. People at the bottom are already making the lowest.

This is ignorance talking. I don't even work in anything remotely related to commercial aviation and I know this is completely off base. The reason for the bankruptcy is clearly explained above from an ex-employee; you Chubby need to read before you post up some blathering OWS opinion. I am sure LAM has a liberal love thread you can hang out in .

Originally Posted by Big Pimpin

Greedy ass unions destroy companies as much as any greedy ass CEO does, just look at every major legacy airline and and GM and Chrysler.

this is the standard anti-union rhetoric from those that know nothing about economics nor pension funds in the US. private pension funds have taken a beating because many over-invested in the stock market during the Internet boom in the 90's and never recovered.

there are dozens of books out there on this topic, you might try reading one of them.

you guys are so late to the game it's pathetic...

Originally Posted by Chubby

Why always attack people at the bottom? It is people on the top who take outrageous amount of bonus (more then their paycheck) and paycheck, and that is making them go out of business. They should get rid of this ridiculuos practice and cut the paycheck and benifit of those pigs. This will solve the whole problems. People at the bottom are already making the lowest.

This, my friends, is a sterling example of what "Ignorance" looks like when let off the leash.

Originally Posted by LAM

this is the standard anti-union rhetoric from those that know nothing about economics nor pension funds in the US. private pension funds have taken a beating because many over-invested in the stock market during the Internet boom in the 90's and never recovered.

there are dozens of books out there on this topic, you might try reading one of them.

you guys are so late to the game it's pathetic...

And BINGO was his nam-O!

I agree that those pensions are ridiculous. Before I blame the unions for everything, I'd Like to see executive comensation, benefits, pensions, etc. A 5 second google search came up with this article from 2003 on executive pensions there.

Protected pensions for AMR’s executives

So a guy getting a $90k per year pension is crushing the company but a guy making $900k earned it, right? Bullshit. It's as much CEO greed as Union greed. The unions made $1.6b in concessions, I wonder how much that protected executive pension fund gave back.

Originally Posted by Dale Mabry

I agree that those pensions are ridiculous. Before I blame the unions for everything, I'd Like to see executive comensation, benefits, pensions, etc. A 5 second google search came up with this article from 2003 on executive pensions there.

Protected pensions for AMR’s executives

So a guy getting a $90k per year pension is crushing the company but a guy making $900k earned it, right? Bullshit. It's as much CEO greed as Union greed. The unions made $1.6b in concessions, I wonder how much that protected executive pension fund gave back.

but Dale the CEO's are more important than those at the bottom, didn't you know that? those that labor at the bottom should be broke and get minimal wages only those at the top should be able to pay their bills and send their children to college with out having to go into massive debt

Originally Posted by LAM

you guys are so late to the game it's pathetic...

While I would never proclaim myself to be the savvy expert in investments, I'd wager to say the "cause" of this Bankruptcy is much more complex and involved than simple "over-investing".

Regardless of who or what is "to blame", you can rest assured the Unions are about to take a beating.

“Our board decided that it was necessary to take this step now to restore the company’s profitability, operating flexibility and financial strength,” Thomas W. Horton, who was named the company’s chairman and chief executive on Tuesday, said in a statement...

One of AMR’s chief goals in bankruptcy will be to lower its labor costs.


The company had been in contract talks with its unions until the negotiations stalled earlier this month when the pilots’ union refused to send a proposal to its members for a vote.

source

Originally Posted by Witmaster

While I would never proclaim myself to be the savvy expert in investments, I'd wager to say the "cause" of this Bankruptcy is much more complex and involved than simple "over-investing".

Regardless of who or what is "to blame", you can rest assured the Unions are about to take a beating.




source

actually it's not really that complex it's the same thing that happened to many of the states and pension funds from teachers unions. many were mismanaged and under funded during certain periods, many over-invested in the stock market during the 90's and a whole bunch invested in securities from wallstreet with their AAA ratings. all of these things have an obvious cumulative effect on returns.

the lack of unions in the US is why we have the highest percentage of low paid workers in the OECD at 25% of the labor force.

Originally Posted by LAM

but Dale the CEO's are more important than those at the bottom, didn't you know that? those that labor at the bottom should be broke and get minimal wages only those at the top should be able to pay their bills and send their children to college with out having to go into massive debt

This is a huge problem in that all the money stays at the top and is protected; the law does need to be changed to make everyone liable to the companies demise not just the labor. It is sad that it has come to this but I am sure the labor union is not the only reason that the company went belly up. Keeping old assets in the air had to be a major contributor an order of magnitude higher than labor costs. Could labor rules be changed to be more flexible, could salaries/wages be looked at, sure but killing the workers provides no incentive for people to work. As you notice, I don't give two shits about getting too much done during the day anymore since the management here doesn't do shit for us. I just get my paycheck and look for better opportunities, sad cause I work with good people.

Originally Posted by Big Pimpin

Now a judge can all but kill their pensions and severely cut their pay just like they did at Delta. To give you an example of the pension cut, a mentor of mine retired as a Captain in '98 having a $98,000/year in pension. He now has a pension worth $24,000/year. On the blue collar side of things my father in-law was making $60,000/yr in international cargo and that was reduced to $40,000/yr. Health insurance costs went up about 50% as well. He hung around a few years after bankruptcy and took the best pseudo early retirement package he could get because Delta as he and many others knew it, was destroyed after bankruptcy. Greedy ass unions destroy companies as much as any greedy ass CEO does, just look at every major legacy airline and and GM and Chrysler.

This, is a crime, IMO. A crime of bad priorities and years - decades - wasted - by people who actually produce, do something that society needs.

Instead, the banksters are bailed out, and lawyers (who push around paper and create nothing of value) ca$h out.

We live in a dysfunctional and moribund society.

With all of those years of work wasted, this reinforces my commitment to work as a poor teacher in foreign countries. At least I am enjoying it.

Originally Posted by Vibrant

When will this downward spiral end?

American Airlines has been weak for years.

But this spiral will continue with other companies in other industries for several years to come.

I wonder how this will impact AMR's recent Boeing 737 & Airbus A320 deal:
AMR makes Boeing, Airbus share huge plane order | Reuters

Originally Posted by Big Pimpin
Greedy ass unions destroy companies as much as any greedy ass CEO does, just look at every major legacy airline and and GM and Chrysler.

Originally Posted by LAM

this is the standard anti-union rhetoric from those that know nothing about economics nor pension funds in the US. private pension funds have taken a beating because many over-invested in the stock market during the Internet boom in the 90's and never recovered.

there are dozens of books out there on this topic, you might try reading one of them.

you guys are so late to the game it's pathetic...

Where in my entire post or in the portion that you quoted of said post did I say pensions brought down any of these unionized companies oh great self-proclaimed economic expert of IM?

Lemme just say, it's both the fault of the top management and the union leaders. Both take in excessive compensation at time (sorry, but $90k a year in pension in ridiculous, as is the $6m salary of the CEO which has been increasing for 6 years straight even with the losses). They both need to take cuts.

Also, American flies a shitty old fleet. Good thing they have all those new 737s, 787s and new airbuses coming in. That will shave a lot of costs. They're going to go back up again.

Originally Posted by Big Pimpin

Where in my entire post or in the portion that you quoted of said post did I say pensions brought down any of these unionized companies oh great self-proclaimed economic expert of IM?

that's why I have an interview at Ernst and Young on Friday in NYC and I don't even have a degree in economics nor have a taken a single business class...

you constantly spout anti-union rhetoric but probably have no clue about large scale construction projects. nor the difference in the training that union members go through vs the complete lack of any formal training by non-union workers.

Originally Posted by LAM

that's why I have an interview at Ernst and Young on Friday in NYC and I don't even have a degree in economics nor have a taken a single business class...

you constantly spout anti-union rhetoric but probably have no clue about large scale construction projects. nor the difference in the training that union members go through vs the complete lack of any formal training by non-union workers.

Good luck in the interview LAM, we don't agree all the time but I do wish people well in their careers no matter what.