Lacking union concessions, American Airlines files for bankruptcy

[vancouver]

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.

Bull Shit! You actually now jack shit about the Investment Markets or the Economy; I on the other hand am licensed to sell securities. You've read a few left wing books and take everything you read to heart. You don't need a degree in Economics to work in the mail room at Ernst and Young.

It's a simple fact that a Union killed GM; the pension plan was GM's single largest liability. Yes their product line went to shit, but if they were not tied to contracts, they could have cut wages significantly in order to rebuild. Instead they did it the new fashion way, declare bankruptcy. There is a long list of corporate victims who shared and will share the same fate. Yes I don't feel sorry for anyone who pushes a button for $30/hr, get's 6-8 weeks holidays per year, buys a house and car bigger than their paycheck and then cries when the Union can't get them a pay raise or save their job. We were not born with the right to a job; we were born free to choose how we make a living. Some choose to risk their life and health, scraping by year after year and many times going broke before they become a success, just to see a union take it all away from them. Is their corporate greed, sure there is, but everything is suply and demand driven and when the system is broken, it fixes itself. If people are too fucking stupid to put a few pennies away while they have a job, I don't feel too sorry for them when they can't make payments on the house and car they couldn't afford to pay for to begin with.

Don't get me wrong, I do enjoy reading your tree hugger posts...keep up the good work; I need a laugh from time to time.

 

[oufinny]

unionistas = death of a great nation

This is an ignorant statement. It has been shown time and time again when they were the most common the nation was at its strongest and "the greatest generation" as they are referred to prospered on real wages and limited to no debt (with high savings amounts that were lost by many in 2000 and 2007). Deny the facts all you want, I did blindly too for a LONG time, but the unions may be the only last vestiges for decent wages in this country sadly. I am a conservative and there is a place for the unions, maybe not in their current form but they need to be there. Now the NLRB needs to fucking go, those ass clowns... don't get me started.

 

[oufinny]

Bull Shit! You actually now jack shit about the Investment Markets or the Economy; I on the other hand am licensed to sell securities. You've read a few left wing books and take everything you read to heart. You don't need a degree in Economics to work in the mail room at Ernst and Young.

It's a simple fact that a Union killed GM; the pension plan was GM's single largest liability. Yes their product line went to shit, but if they were not tied to contracts, they could have cut wages significantly in order to rebuild. Instead they did it the new fashion way, declare bankruptcy. There is a long list of corporate victims who shared and will share the same fate. Yes I don't feel sorry for anyone who pushes a button for $30/hr, get's 6-8 weeks holidays per year, buys a house and car bigger than their paycheck and then cries when the Union can't get them a pay raise or save their job. We were not born with the right to a job; we were born free to choose how we make a living. Some choose to risk their life and health, scraping by year after year and many times going broke before they become a success, just to see a union take it all away from them. Is their corporate greed, sure there is, but everything is suply and demand driven and when the system is broken, it fixes itself. If people are too fucking stupid to put a few pennies away while they have a job, I don't feel too sorry for them when they can't make payments on the house and car they couldn't afford to pay for to begin with.

Don't get me wrong, I do enjoy reading your tree hugger posts...keep up the good work; I need a laugh from time to time.

You of ALL people should know that savings is a net loss now with interest rates by the highest paying banks 1% with inflation at 7-8%. Even a quality ROI in the stock market of 10-15% nets you a wopping 3-7%, you could get that on T-bills in the late 90s yet now we get fucking nothing. There is plenty of blame to go around but the people you so proudly work for are a major cause of this problem courtesy of their lobbyists. I studied finance and economics, I am far from an expert and know this, but I can do math and since most all finance is basic algebra, so can many people on here and in this country. The liberals aren't saving us nor are the conservatives, the system is completely rigged to fail so pointing the finger at one of many causes does nothing to change the end result.

As I say to anyone and expect to be asked of me, it is one thing to point out a problem, it is entirely another and increasingly rarer, to present real solutions to complex problems. Destroying the unions is not a real solution either.

 

[vancouver]

A tale of 2 Airlines

Airline A has filed chapter 11 2x in their multi decade history and seen their stock price fall more than 80% int he last 10 years. Thier employees hate their company and provide horrible service inflight.

Airline B has very happy employees and have see their stick price grow more than 50% in the last 10 years, despite the market returning essentially zero over that time.

What is the main difference between Airline A and B? Airline A is unionized and Ariline B is not. The Airlines I'm talking about are Air Canada and Westjet; Canada's 2 major national Carriers. Oh we had more in the past, but they all went broke; they were also unionized.

So how did Westjet manage to keep the union away? The made all of their employees owners. Yep, they all own shares and while their colleages at Air Canada are facing wage and pension cuts, thier pensions are up, becaue they are fully invested in the company, they actually care about their company. How many Union members can say the same about their own companies...

There's another famous company that also encourages it's employees to buy stock and display's the companies stock ticker in the lunch room; it's called Walmart. Yes they pay shity wages, but many of their long-term employees are now millionaires. Yes, some Walmarts have Unionized, but many have told the Unions to fuck off...good for them.

The first chart is Air Canada, the second is WestJet, sorry not all the data copied, but you can look the tickers up yourself...

 

[vancouver]

You of ALL people should know that savings is a net loss now with interest rates by the highest paying banks 1% with inflation at 7-8%. Even a quality ROI in the stock market of 10-15% nets you a wopping 3-7%, you could get that on T-bills in the late 90s yet now we get fucking nothing. There is plenty of blame to go around but the people you so proudly work for are a major cause of this problem courtesy of their lobbyists. I studied finance and economics, I am far from an expert and know this, but I can do math and since most all finance is basic algebra, so can many people on here and in this country. The liberals aren't saving us nor are the conservatives, the system is completely rigged to fail so pointing the finger at one of many causes does nothing to change the end result.

As I say to anyone and expect to be asked of me, it is one thing to point out a problem, it is entirely another and increasingly rarer, to present real solutions to complex problems. Destroying the unions is not a real solution either.

T-bills of the 90's will never, never happen again, not in our lifetime. They were high because the demand for money was high. The boomers where buying houses and cars and businesses could not produce a product fast enough. When you remove the 80's and 90's, the 100 year t-bill average is less than 4%. All one has to do is pick up a book (investing for dummies) and you can learn how to earn a decent risk free return, no matter what the state of the economy (or investment markets).

I don't work for one of the large Bay Street firms (Wall Street in Canada); I'm an independent, I don't sell products that have been underwritten by my dealer. So I'm not even close to being part of that so called problem. Of the hundreds of clients I've worked with in 15 years; a handful read a book on investing or finance. Everyone wants to be spoon fed today; that's the problem with society, not wall street.

I've been fucked over in business and life too many times to count, but the difference between me and the average schmuck is; I learned something every time. No one can screw you, you can only allow yourself to be screwed by being uneducated. Education is CHEAP; I picked up most of my books at the thrift store when I was in my early 20's and took my college courses by correspondence while I worked full time. I don't feel sorry for anyone who has been lead to the trough, but I do feel bad for their kids.

 

[Dale Mabry]

It's a simple fact that a Union killed GM; the pension plan was GM's single largest liability. Yes their product line went to shit, but if they were not tied to contracts, they could have cut wages significantly in order to rebuild. Instead they did it the new fashion way, declare bankruptcy. There is a long list of corporate victims who shared and will share the same fate. Yes I don't feel sorry for anyone who pushes a button for $30/hr, get's 6-8 weeks holidays per year, buys a house and car bigger than their paycheck and then cries when the Union can't get them a pay raise or save their job. We were not born with the right to a job; we were born free to choose how we make a living. Some choose to risk their life and health, scraping by year after year and many times going broke before they become a success, just to see a union take it all away from them. Is their corporate greed, sure there is, but everything is suply and demand driven and when the system is broken, it fixes itself. If people are too fucking stupid to put a few pennies away while they have a job, I don't feel too sorry for them when they can't make payments on the house and car they couldn't afford to pay for to begin with.

Don't get me wrong, I do enjoy reading your tree hugger posts...keep up the good work; I need a laugh from time to time.

Idiotic statements much? I am sure that the 3% COL increase that is given to people actually doing work and not the 11% pay increase the CEO got last year despite the company losing money for 5 of the 7 years he was CEO in cluding the last 2 years is the cause of the companies demise. I'm sure aircraft that are 30+ years old that need to be maintained probably multiple times a day has nothing to do with it. MD-80s were outdated 15 years ago when I graduated from college.

If everything is supply and demand driven how do the unions drive a company in to the ground? If it were a simple fact of them not producing enough, which it obviously isn't in this case, why wouldn't the company build incentives in to the contract? Why is it up to the unions to police themselves? Because it's not, it's a terribly run company with about 50 things wrong with it, but because the union contracts are the highest liability that is the problem. Riiiiiight. Employees are always the highest liability for a service company, that's just common sense.

 

[Zaphod]

Bull Shit! You actually now jack shit about the Investment Markets or the Economy; I on the other hand am licensed to sell securities. You've read a few left wing books and take everything you read to heart. You don't need a degree in Economics to work in the mail room at Ernst and Young.

It's a simple fact that a Union killed GM; the pension plan was GM's single largest liability. Yes their product line went to shit, but if they were not tied to contracts, they could have cut wages significantly in order to rebuild. Instead they did it the new fashion way, declare bankruptcy. There is a long list of corporate victims who shared and will share the same fate. Yes I don't feel sorry for anyone who pushes a button for $30/hr, get's 6-8 weeks holidays per year, buys a house and car bigger than their paycheck and then cries when the Union can't get them a pay raise or save their job. We were not born with the right to a job; we were born free to choose how we make a living. Some choose to risk their life and health, scraping by year after year and many times going broke before they become a success, just to see a union take it all away from them. Is their corporate greed, sure there is, but everything is suply and demand driven and when the system is broken, it fixes itself. If people are too fucking stupid to put a few pennies away while they have a job, I don't feel too sorry for them when they can't make payments on the house and car they couldn't afford to pay for to begin with.

Don't get me wrong, I do enjoy reading your tree hugger posts...keep up the good work; I need a laugh from time to time.

It wasn't unions that hurt GM. It was a shit product line with shit quality and ever improving competition. A corporate culture of no improvement surely didn't help.

 

[vancouver]

Idiotic statements much? I am sure that the 3% COL increase that is given to people actually doing work and not the 11% pay increase the CEO got last year despite the company losing money for 5 of the 7 years he was CEO in cluding the last 2 years is the cause of the companies demise. I'm sure aircraft that are 30+ years old that need to be maintained probably multiple times a day has nothing to do with it. MD-80s were outdated 15 years ago when I graduated from college.

If everything is supply and demand driven how do the unions drive a company in to the ground? If it were a simple fact of them not producing enough, which it obviously isn't in this case, why wouldn't the company build incentives in to the contract? Why is it up to the unions to police themselves? Because it's not, it's a terribly run company with about 50 things wrong with it, but because the union contracts are the highest liability that is the problem. Riiiiiight. Employees are always the highest liability for a service company, that's just common sense.

Nope, if a business is suffering through lack of demand, they make cuts in order to bring costs inline with demand. Labor is the single biggest liability on a corporations balance sheet (this is pretty well the first lesson you learn in business school or accounting). If you can't cut labor costs fast enough, the business dies.

The only think more stupid that posting shit without understanding the basic structure of a balance sheet is actually believing what your write.

The CEO and top execs pay are a drop in the bucket compared the entire company, no matter how gross you might think they are...

 

[vancouver]

It wasn't unions that hurt GM. It was a shit product line with shit quality and ever improving competition. A corporate culture of no improvement surely didn't help.

No it was the Union. Yes GM had a shitty product at the end of the day, but it was their inability to reinvent themselves due to cost constraints which killed them. All one has to do is a little research to find out GM's biggest balance sheet liability was pensions and benefits (which falls into labor). Pensions were negotiated by the union and as some have already pointed out in this thread, many industries had negotiated ridiculous pension when demand for their product was high. GM tried to cut benefits in the early stage of their crisis, only to have the union shut them down.

GM will be a case study in university forever, trust me, the labor liability will beat out the quality control argument more times then not. Though if you are looking for a reason that would justify unions, clearly you're going to lean towards blaming the business.

Unions had a place in history...they don't anymore.

 

[Zaphod]

No it was the Union. Yes GM had a shitty product at the end of the day, but it was their inability to reinvent themselves due to cost constraints which killed them. All one has to do is a little research to find out GM's biggest balance sheet liability was pensions and benefits (which falls into labor). Pensions were negotiated by the union and as some have already pointed out in this thread, many industries had negotiated ridiculous pension when demand for their product was high. GM tried to cut benefits in the early stage of their crisis, only to have the union shut them down.

GM will be a case study in university forever, trust me, the labor liability will beat out the quality control argument more times then not. Though if you are looking for a reason that would justify unions, clearly you're going to lean towards blaming the business.

Unions had a place in history...they don't anymore.

Quality control and unions had nothing to do with GM nearly going under. There was no quality control to blame and the unions only built what they were told to build with the shit parts they were given. Labor cost is part and parcel of doing business. Unless it's a fucking Transformer a car isn't going to build itself. By losing market share to competitors with better products GM fucked themselves by continuing to build shoddy products. If you aren't selling your products you are losing money. That is what happened to GM. Labor had nothing to do with it.

 

[BP2000]

A tale of 2 Airlines

Airline A has filed chapter 11 2x in their multi decade history and seen their stock price fall more than 80% int he last 10 years. Thier employees hate their company and provide horrible service inflight.

Airline B has very happy employees and have see their stick price grow more than 50% in the last 10 years, despite the market returning essentially zero over that time.


So how did Westjet manage to keep the union away? The made all of their employees owners. Yep, they all own shares and while their colleages at Air Canada are facing wage and pension cuts, thier pensions are up, becaue they are fully invested in the company, they actually care about their company. How many Union members can say the same about their own companies...

This is how the company's of the future will be profitable. The employee's will be invested in the business. Not separation of us versus them. And not "Ill do my time for 20 years and expect a pension".

A friend of mine just got hired for Eagle. Hope this pans out well for the regional.

 

[ALBOB]

It wasn't unions that hurt GM. It was a shit product line with shit quality and ever improving competition. A corporate culture of no improvement surely didn't help.

Quality control and unions had nothing to do with GM nearly going under. There was no quality control to blame and the unions only built what they were told to build with the shit parts they were given. Labor cost is part and parcel of doing business. Unless it's a fucking Transformer a car isn't going to build itself. By losing market share to competitors with better products GM fucked themselves by continuing to build shoddy products. If you aren't selling your products you are losing money. That is what happened to GM. Labor had nothing to do with it.

These two statements SEEM to be completely contradictory. Please help me understand what you're saying.

 

[Chubby]

Nope, if a business is suffering through lack of demand, they make cuts in order to bring costs inline with demand. Labor is the single biggest liability on a corporations balance sheet (this is pretty well the first lesson you learn in business school or accounting). If you can't cut labor costs fast enough, the business dies.

If this is the best you learn from business school to balance the budget, then these business schools need to be shut down. they should stop producing bunch of morons who don't know how to run business. You don't need any kind of degree to know how to balance budget that way. Taking away from others while keeping yours intact is not a good way. Even fool can do it that way.

 

[Dale Mabry]

Nope, if a business is suffering through lack of demand, they make cuts in order to bring costs inline with demand. Labor is the single biggest liability on a corporations balance sheet (this is pretty well the first lesson you learn in business school or accounting). If you can't cut labor costs fast enough, the business dies.

The only think more stupid that posting shit without understanding the basic structure of a balance sheet is actually believing what your write.

The CEO and top execs pay are a drop in the bucket compared the entire company, no matter how gross you might think they are...

That is where you and I disagree. Companies pay those large salaries to CEOs so that they can generate demand through programs and innovation, the labor is there to put the plan in to action. There has been no problem in the execution, the problem has been in the plan so that's where the cuts should come from. I agree that unions in general are a problem and much of that problem stems from the contracts, but I don't recall a gun being put to the company's head to sign it. If the contract was so terrible that it would lead to major losses, why would the company sign it? Are they completely unaccountable for signing something that didn't work? The last I checked it's up to the finance department of that company to figure out if the contract will cause losses before they sign it. Obviously they thought they'd do better, but how is a company projecting incorrectly labor's fault? Put more simply, do you think a person who purchases a home they can't afford is at fault when they get foreclosed on? Of course they are. The article itself says their entire fleet is outdated, who wants to get on a 50 year old plane that's falling apart? I would have to imagine fuel efficiency is quite good on a 5 year old aircraft as well.

The problem isn't labor not doing their job, it's upper level management not doing their's. What the fuck are they paying their executives to do anyway? The CFO can't tell a shitty contract when he sees it? Sounds more like labor is a convenient scapegoat when management isn't doing their job.

 

[Thee_One]

I don't have anything to add, but this is a great thread to read.
Thanks guys.

 

[vancouver]

That is where you and I disagree. Companies pay those large salaries to CEOs so that they can generate demand through programs and innovation, the labor is there to put the plan in to action. There has been no problem in the execution, the problem has been in the plan so that's where the cuts should come from. I agree that unions in general are a problem and much of that problem stems from the contracts, but I don't recall a gun being put to the company's head to sign it. If the contract was so terrible that it would lead to major losses, why would the company sign it? Are they completely unaccountable for signing something that didn't work? The last I checked it's up to the finance department of that company to figure out if the contract will cause losses before they sign it. Obviously they thought they'd do better, but how is a company projecting incorrectly labor's fault? Put more simply, do you think a person who purchases a home they can't afford is at fault when they get foreclosed on? Of course they are. The article itself says their entire fleet is outdated, who wants to get on a 50 year old plane that's falling apart? I would have to imagine fuel efficiency is quite good on a 5 year old aircraft as well.

The problem isn't labor not doing their job, it's upper level management not doing their's. What the fuck are they paying their executives to do anyway? The CFO can't tell a shitty contract when he sees it? Sounds more like labor is a convenient scapegoat when management isn't doing their job.

I will say that I don't completely disagree with you. I do believe management fucked up and they quite often do. Replacing managment isn't easy, replacing regular staff is. Without a union, it's even easier.

The problem with unionized business and government in general is entitlements. dumb ass executives do sign shitty contracts when times are good, not testing it for bad times they might not foresee. A business can cancel orders or cancel projects in order cut costs, but going back on a union contract takes time and money, it's always a losing proposition.

Not being able to sucessfully lower costs as quickly and efficiently as possible, in order to improve the balance sheet, allowing for investment in the business (new planes perhaps), does not only risk primary jobs, but jobs within secondary industries. The damage is a lot greater.

The problem in today's society is that people care more about their own jobs than the financial health of their industy. Kill the industry and you kill your job prosepcts within it. I think people need to start accepting the fact that they might not allways have a job, the better prepared they are, the better prospects they will have. Or they can buy into the bullshit that the union will protect the right to high pay and the good life.

This article is one persons perspective. Just like it is the perspective of some that GM went out of business because they had a shitty product. McDonalds has a shitty product, but they have a labor strategy that is genious. Pay teens and seniors shitty wages. Last I checked, most 16 year olds do not belong to food services unions...

 

[LAM]

Bull Shit! You actually now jack shit about the Investment Markets or the Economy; I on the other hand am licensed to sell securities. You've read a few left wing books and take everything you read to heart. You don't need a degree in Economics to work in the mail room at Ernst and Young.

It's a simple fact that a Union killed GM; the pension plan was GM's single largest liability. Yes their product line went to shit, but if they were not tied to contracts, they could have cut wages significantly in order to rebuild. Instead they did it the new fashion way, declare bankruptcy. There is a long list of corporate victims who shared and will share the same fate. Yes I don't feel sorry for anyone who pushes a button for $30/hr, get's 6-8 weeks holidays per year, buys a house and car bigger than their paycheck and then cries when the Union can't get them a pay raise or save their job. We were not born with the right to a job; we were born free to choose how we make a living. Some choose to risk their life and health, scraping by year after year and many times going broke before they become a success, just to see a union take it all away from them. Is their corporate greed, sure there is, but everything is suply and demand driven and when the system is broken, it fixes itself. If people are too fucking stupid to put a few pennies away while they have a job, I don't feel too sorry for them when they can't make payments on the house and car they couldn't afford to pay for to begin with.

Don't get me wrong, I do enjoy reading your tree hugger posts...keep up the good work; I need a laugh from time to time.

sorry but I don't read "left wing" books, your another person that constantly labels everything objectivity isn't your strong point I take it. I read the raw data and go from there, it's what I've been doing for 2 decades now. I prefer to read the legislation and bankruptcy filings, they are a little dry but you get used to it.

 

[vancouver]

sorry but I don't read "left wing" books, your another person that constantly labels everything objectivity isn't your strong point I take it. I read the raw data and go from there, it's what I've been doing for 2 decades now. I prefer to read the legislation and bankruptcy filings, they are a little dry but you get used to it.

It's a shame you don't get paid for reading all that hard data...

 

[maniclion]

You know who else gets ridiculous pension plans, salaries and the like? Executives like CEO's and at the figures they make shouldn't they take the brunt of the blame for failure on epic scales? Are they not the Chief Executive Officer making the decisions that put the company in jeopardy and after all the laborers lose their jobs and pensions they glide through life dangling from a golden parachute....

 

[maniclion]

This article is one persons perspective. Just like it is the perspective of some that GM went out of business because they had a shitty product. McDonalds has a shitty product, but they have a labor strategy that is genious. Pay teens and seniors shitty wages. Last I checked, most 16 year olds do not belong to food services unions...

that's what we need is more companies paying people barely livable wages so they can't buy anything, consumption declines and more companies have to cut wages until we are all making $10 shoes for Chinese middle class brats to buy at $200 to play basketball in and shoot each other over....

 

[vancouver]

You know who else gets ridiculous pension plans, salaries and the like? Executives like CEO's and at the figures they make shouldn't they take the brunt of the blame for failure on epic scales? Are they not the Chief Executive Officer making the decisions that put the company in jeopardy and after all the laborers lose their jobs and pensions they glide through life dangling from a golden parachute....

It's pretty simple then. Become a CEO, or your own CEO!

 

[irish_2003]

It's pretty simple then. Become a CEO, or your own CEO!

Chris Christie/Paul Ryan 2016

 

[LAM]

It's a shame you don't get paid for reading all that hard data...

it's what I do for fun, i'm basically semi-retired so I might work 15 hours a week on average and I don't sleep much either. when I was younger I couldn't remember history for shit but since self-learning economics I can tie historical and economic events together which has made it much easier and kind of fun. I used to hate history, now not so much.

 

[GearsMcGilf]

Chris Christie/Paul Ryan 2016

Sarah Palin/Michelle Bacman 2012!

 

[GearsMcGilf]

Bull Shit! You actually now jack shit about the Investment Markets or the Economy; I on the other hand am licensed to sell securities.

Actually, I dont know that a holding a Series 7 & 63 is the equivilent of a PhD in finance. IDK what it's like in Canada But to me, the NASD Series 7 just seemed to test you on rules/regs and different types of products.

 

[Dale Mabry]

It's pretty simple then. Become a CEO, or your own CEO!

That's good for the individual but terrible for the company. Think about it, if they paid a livable wage there would be no need for a union.

 

[Zaphod]

These two statements SEEM to be completely contradictory. Please help me understand what you're saying.

They had no quality control in charge of quality so there is nothing to blame there.

 

[Zaphod]

That's good for the individual but terrible for the company. Think about it, if they paid a livable wage there would be no need for a union.

Don't bring logic into this. It just waters down the argument.

 

[ALBOB]

They had no quality control in charge of quality so there is nothing to blame there.

They failed due to the poor quality of their product. Their product had poor quality because they didn't have a quality control process in place. If that's what you're saying then I understand.

 

[vancouver]

Actually, I dont know that a holding a Series 7 & 63 is the equivilent of a PhD in finance. IDK what it's like in Canada But to me, the NASD Series 7 just seemed to test you on rules/regs and different types of products.

CIM and CFP. Pretty heavy finance components. Series 7 or CSC is like a weekend course compared...