…ON THE EVE OF THE MOU VOTE, THE MOU IS MODIFIED…WHAT EXACTLY ARE WE NOW VOTING ON?
One of the provisions of the MOU is that the AMR Board either approves of, or disapproves a merger with USAirways, prior to the announcement of the results of the USAPA pilots’ vote on the MOU. This is a key element in that it prevents the outcome of your vote having a material effect on their decision and that of the bankruptcy court.
If you went to buy a $35,000 car and walked into the dealership after you told the salesman the day before that you will pay retail, because you really, really want to buy into the “American Motors Family” and that no price is too great to pay; just how much of your $35,000 would you have, when you drove out with your shiny new uniform….err, I mean car?
The provision in the MOU is contained within Paragraph 18, reprinted just below. Read it and ponder.
18. a. This Memorandum shall become effective (the “Memorandum Approval Date”) upon the date when all of the following have occurred: (i) approval by APA’s Board of Directors; (ii) approval by US Airways’ Board of Directors; and (iii) approval by AMR Corporation’s Board of Directors. If all of these approvals do not occur, this Memorandum shall be null and void in its entirety and as to all Parties.
b. This Memorandum shall become applicable to USAPA upon the later of (i) the Memorandum Approval Date; and (ii) USAPA’s Board of Pilot Representatives’ recommending that USAPA’s membership ratify this Memorandum and USAPA’s membership’s subsequent ratification of this Memorandum. USAPA will inform the Parties whether its Board of Pilot Representatives has agreed to recommend that its membership ratify the MTA on or before January 4, 2013. If recommended, the ratification vote of USAPA’s membership shall be completed no earlier than approval of the Merger by AMR Corporation’s Board of Directors and no later than 60 days after such approval (if any). If such recommendation and ratification do not timely occur, this Memorandum shall be of no force or effect as to USAPA but shall remain in full force and effect as to the other parties.
IF ONLY WE LISTEN
American Airlines pilots are a pretty hard-nosed bunch. In bankruptcy, they were handed an ultimatum from AMR management to “take it or leave it” and that was affirmed by their then APA President.
What did those boys do? They told AMR to go sit on a tack and they changed union leadership. We could learn something from those guys.
American started hiring in 1983 and whatever growth they have seen has come as a result of internal growth, very little from mergers.
INSIGHTS FROM A DAY AT THE MOU ROAD SHOW.
Well, a bunch of us spent the day at the PHL Marriott road show on Monday, including your two authors. We have been repeatedly chastised by a certain fellow pilot for our criticisms of the MOU; he claims that until we heard the road show, we wouldn’t understand. Our friend assured us that the NAC would have good answers for all our questions. The two of us have to assume that the show was much better at CLT, because neither of us got much of a “warm-fuzzy.”
The last Compass Correction featured an “Open Book Test” for the NAC. The pivotal question in that test was #6: “If American Airlines pilots received 13.5% equity in the New American Airlines and that equals $1,000,000,000; what is the total value of the New American Airlines?” (All of the above numbers come directly from our NAC). It turns out that although the 13.5% equity (stock ownership) calculations were based upon a stand-alone American emergence from bankruptcy, the actual stock will be issued as New American Airlines, which in all likelihood will include US Airways; that is a very different matter.
Our little group had one of those light bulb moments yesterday, while listening to the NAC. In attendance were two APA committeemen, who helped to answer the question of their equity stake. A fellow named Neil, who is the APA Negotiating Chair and Bob, the APA Scope Chair attended all three sessions at PHL. They were available to answer questions.
The Compass Correction has urged our fellow pilots to read the MOU and associated USAPA Communiqués on the subject of the Virtual Merger of the bankrupted American Airlines and the highly profitable US Airways. After reading Friday’s update from the NAC, we believe a test of their knowledge may be in order. WE URGE EVERYONE TO ATTEND THE NAC ROAD SHOWS!
1. What is the total dollar value of concessions by US Airways Pilots (East) for the following concessionary contracts (RA, LOA 84, LOA 85 – loss of pension, LOA 91 and LOA 93) since 2002?
2. What has been the monetary value for the Company and shareholders, in keeping the West Pilots at their December 31, 2006 amendable date contract?
3. What was the gross profit for LCC (US Airways) for 2010, 2011and 2012?
4. What were the financial results for American Airlines, during the same period?
5. What have the West and East Pilots received in the way of return value, for the concessions totaled above in answer in 1 & 2?
6. If American Airlines pilots received 13.5% equity in The New American Airlines and that equals $1,000,000,000; what is the total value of The New American Airlines?
7. Is there a date certain for the “Effective Date”?
8. If the POR date is protracted, is there any remuneration for the interest free loan being provided by the US Airways Pilots?
9. What agreement or tentative agreement contains the following contract language
If the Company obtains a new equity investment in an amount greater than $250 million, the percentage of the economic value of the common equity, on a fully diluted basis, offered to the Association’s members shall be reduced on a proportionate and appropriate (i.e., related to the size of the investment) basis to be determined in light of all of the relevant facts and circumstances.
B) Term Sheet
D) LOA 93
E) Grimm’s “Hansel and Gretel”
F) LLBFO (CBA 2012)
10. Extra credit Question: What is the net gain in value to the New American Airlines subsequent to a merger with LCC?
DON’T BELIEVE IN COC LANGUAGE?
MR. PARKER DOES!
Below is an article from Ted Reed, in April, 2010.
US Airways: Pilot Contract Threatens Merger
By Ted Reed 04/06/10 – 11:22 AM EDT
CHARLOTTE, N.C. (TheStreet) — Although US Airways is clearly eager to merge with another carrier, its efforts could be blocked by a provision in its pilots contract, says CEO Doug Parker.
Speaking to pilots at a March 17 meeting in the company’s Charlotte training center, Parker reflected on a contract provision requiring that if the airline has a change of control, pilot wages would “snap back” to a far higher level that was in place before the carrier extracted wage concessions in two bankruptcies in 2002 and 2004.
“We’ve had talks with airlines in the past,” Parker said. “This (provision) always comes up. (It) is a large issue in consolidation talks. There will not be a merger if that’s where the pay rates go. Anybody we would merge with can’t let the pay rates go to those levels.”
“You can’t have both,” Parker added. “You can’t have a merger with that provision. (It) will either result in a merger never being done or it will be a merger that doesn’t trigger that provision.”
SCOPE NOTES #5
SCOPE NOTES, FOR YOUR CONSIDERATION.
It pains the writers of the Compass Correction to have to be the ones to disseminate the educational information below. This update was delivered some time ago to Captain James Ray, USAPA Communications Chairman, by the Grievance Committee Chairman. It is intended to reacquaint our pilots with the Section 1, Scope Language so you can make an informed vote on the MOU.
The Officers of USAPA forbade James Ray from printing and distributing the information below. Whatever their rationale, we at the Correction, believe that you are smart enough to figure out what is germane to your decision making and what is not. Please read, consider what a voluntary and non-reciprocal surrender of the language below would do for and to your rights as a US Airways Pilot. Later….consider why your union thinks certain information should be withheld from you; even things one can find in our Working Agreement.
Think much, act slowly and with deliberation.
Woody Menear PHL-7i
With the ratification vote underway by our Membership pertaining to a MOU on the potential combination of US Airways and American Airlines, the Grievance Committee would like to stress the absolute necessity for our members to review and understand the most important section of our contracts; Section 1, Scope. Armed with a clear understanding of the protections and options provided by our existing contract language, we can effectively weigh the value and consequences of our vote for or against the proposals and incumbent waivers of Scope that will be central to any agreement.
Below is part five in a series of educational updates titled, Scope Notes.
Thanks for staying informed and for always enforcing our contract.
The Grievance Committee Read More…
ALWAYS MAKE SURE THE RIGHT FLIGHT PLAN IS LOADED INTO THE COMPUTER!
Compass Correction writers are noted for a satirical and irreverent style. We try to poke a little fun, while making serious points and asking probing questions. I don’t feel light hearted or satirical today, but I’m sure I’ll warm to the subject as I ponder this MOU.
We are now voting on the recently completed Memorandum of Understanding, which will serve as an interim guide to your working conditions, until The Green Book becomes your working agreement, and that assumes if the merger even happens.
If the MOU is any indication (and it is) – US Airways Pilots’ lives will not be improved, except for more money, (of which you shall earn every penny, when it eventually, maybe, shows up in your check).
Also, US Airways, as a medium sized, National Carrier, with a small, but steady and growing International presence will be no more. The very thing that made us the Flying Cockroach which the big airlines couldn’t kill will be gone and we will have done so voluntarily, as we did when 9-guys signed away your pension. This IS history and circumstances repeating. We shall lose our attrition advancements too.
Did you know?