The UA employee/ownership relationship is a joke and makes a very poor arguement. unions took major wage roll backs in exchange for stock ownership in the company and for some of the seats on the board. Not all unions agreeded to this and the majority of the board is not made up of UA employee's.

It is very obvious that if the employees were true "owners" then why did it take so long to settle just the pilots contract?

You can make the argument that anyone who owns stock in the company that they work for could be called owners. Since most 401k plans use their own company stock then just about everyone who has a 401k plan is a "owner" of their employee.

UA management has never treated the employee's as "owners". They have been very hostile torwards the unions and only put up with the pilots being on the board becuase they had to.

The employees have never had much of a say as to the management team that runs United. If you make the argument that it is the "employee's/owners" job to ensure this then do you blame the employee's of Enron for the fall of that company?

The other issue is only employee's hired before 1993(not sure of the exact year) were opted into the "employee/ownership" tittle. All people hired after that date were hired under different contracts (except the pilots) at half the pay and no benefits to speak of. It was only recently did managment realize this was a major mistake since the turn on these new hires was much greater then the older employee's. This also created friction between employees and generated poor customer service. Do you really think if the employees were true owners that they would let this happen?

I doubt United is going to go out of business. The company is too big and the other airlines do not have enough slack to pick up all of the pieces. Even if United goes Bankrupt, they will not go out of business but use the courts to rewrite contracts and discharge debt.

For the record I am not an employee of United and I have only flown them once in the past year--and that is becuase Alaska canceld their flight and put me onto United.
The rumor that United is going to sell its London Heathrow slots is a joke. Those slots are a cash cow. Business people want to fly into Heathrow, not Gatwick and business fares is where the airlines make their money. The revenue generated from those flights each year is greater than what Delta would be willing to pay for them.

The people who are killing the airline are the pilots. If they wanted to "save" the airline they would be walking up to the table and asking to renegoiate their contract. The top tier wage of a mechanic is only a fraction of what the pilots earn.


[This message has been edited by Tango (edited 02-13-2002).]

Because in case you haven't noticed, things are different. We do not have a booming economy with lots of business travel. We had terrorists destroy buildings with planes and people who are now afraid to fly.

You can't compare what happened with the pilots to what's happening now with the mechanics. In one situation, you've got a very profitable company, in the current one, you've got one bleeding red ink.

There is one glaring difference between the "employee-ownership plan" and a 401(k) plan. United employees own a majority of the company. It doesn't matter if they were pre-1993 or post 1993. United employees own 55% of the company. There is nobody who could stop them if they decided WITH ONE VOICE to replace the board.

This whole scenario reminds me of the person who so badly wants a new car that they take a bad deal from the salesperson. Then a few years later when the bug bites again, they realize they got screwed on the original deal. United unionized employees so despised Stephen Wolf that they would pay ANYTHING to be rid of him. And they did.

The post-1993 employees hired on knowing that they were getting paid a lower wage, without benefit of ownership. They made the choice. Who forced them to accept the job?

You doubt that United could disappear? Ask a former PanAm employee who felt that way. Even up until the sale to Delta, they were the biggest trans-atlantic carrier, by far. Or ask a former Braniff employee, for that matter, they were once the biggest carrier to South America. Delta's been known to overpay before, and still has plenty of cash. Heck, WN could buy the DEN hub and every 737 UA still has and Herb wouldn't notice a change in the thickness of his wallet. Anyone who thinks UA is "too big to fail" is only deluding themselves.

You are right that the pilots are hurting the airline. But they have plenty of help. Mechanics, flight attendants who got a new contract halfway thru the existing one, and management who never improved the relationship with employees after they bought the company.

Why are you so anti-pilot, Tango? I still think there's something about you that you are not telling. Very rarely is there anyone on here so willing to place blame squarely on one group....

Just to interject, FWIW:

Northwest Mechanics Urge Government to Stay Out of United Airlines Contract Negotiations

Aircraft Mechanics Fraternal Association (AMFA) Local 33, serving Northwest and Mesaba Airlines in the Twin Cities, today voiced support for United Airlines mechanics, custodians and cleaners by urging the President and Congress to stay out of United contract negotiations.

The United employees, members of the International Association of Machinists and Aerospace Workers (IAM), by a substantial margin yesterday rejected a contract offer with terms imposed by a Presidential Advisory Board.

http://biz.yahoo.com/bw/020213/132431_1.html

Personally, I agree that the Bush administration should no longer intervene. I think UA should come back with its "last, best" offer, based upon the current realities of the industry, and let the union do the same. But both sides should make both offers fully available to the public. If UA decides not to accept the mechanics offer, and the union decides not to put the company's offer to a vote, then let both sides engage in self help.

Whats the point of threatening to strike if nobody will let you?!?!?!?!

[This message has been edited by duxfan (edited 02-13-2002).]

MDTONY: The pilots knew of the downturn in business when they got their contract. They realized this their contract was one big pill that United had to take.

Duxfan: I agree that 55% stock ownership in principal would be enough to vote out the board but in reality this is all but impossible to do.

Braniff and Pan Am went bust in a different time. These were two airlines that did not have major domestic feeds and did not adapt to the changing times in the 80's. United is a very different airline and I do not understand how you can compare it to Pan Am and Braniff.
I question why would United sell its Heathrow slots when the amount they would earn from these routes is far greater than what they would realize in the sale of these routes. If United did sell these routes (and I doubt they will) then they deserve to go under.

You are correct in questioning why people would work for United at a subpar wage after 1993. Many people quit after they realized the people they were working next to were getting paid twice as much. I do not blame the fellow employee's for this but lousy management(they even admit it was a mistake).

I am not anti-pilot. I only call it as I see it. Most pilots(not all) that I have talked to come across as arrogant and over paid. Even if the mechanics got a contract of a top wage of $50.00 an hour, this is only 1/6 of what the top tier UA pilots make! Does that make sense?

I am sure the mechanics are fully aware of the risks involved in what they are doing. Should they not be given the right to decide?

So Braniff and PanAm were victims of changing times? Just what do you think has happened in this industry in the past 2 years? The airlines themselves have destroyed the pricing model that they relied so heavily on for years. The airlines (UA included) have relied on the full fare paying traveller to subsidize the travel of the super saver fare paying customer. The problem is that in the chase for more and more revenue, the airlines have created sites like Orbitz, and owned sites like Priceline, which encourage travellers to pay less, not more for their product. I also think it is fair to say that the industry changed significantly in the wake of 9/11.

Then top off the decline in yields with increased low fare competition. Southwest, JetBlue, and Airtran are eating away at yields by offering low fares which they make money on! Their costs are in line with their yields. Most of the majors have watched costs spiral out of control, while at the same time watched yields take a huge hit.

~puts on bob dylan CD~ times, they are a'changin....

remember, the most profitable part of PanAm in 1985 was the Pacific division, and they sold it. I used the LHR rumor as an example about the labor, which you conveniently missed.

you don't blame "fellow" employees (your words) for the differences in wage scale following the ESOP? fellow employees? methinks you are not being 100% truthful with all of us here. HOWEVER, that being said, was this two-tiered wage scale imposed on UA mechanics? no..... It was approved in a vote of UA mechanics. UA mechanics voted to screw over their fellow employees hired after them. At the time it was better than having to give them a share of the company when they hired on. That way the UA employees who were in the ESOP from the start got 100% of the benefit! Sounds a little greedy to me....

Your question of the top mechanic making 1/6 of what the top pilot makes reveals your true gripe. From each according to their ability, to each according to their needs, huh? It's just not FAIR that one person makes more than another, right? Then why is it fair that the most senior mechanic make more than the most junior? Thats just not FAIR either, is it?

Airlines shouldn't be socialist experiment centers....

Thank you!

And neither should any other business! There are still a few European socialist paradises left in the world. All socialists are invited to live and practice their philosphies there to their hearts content!!

Duxfan:

The airlines created Orbitz to compete and someday drive Expedia and Travelocity out of business. They got into this problem in the first place becuase they cut online commissions to $10 a pop forcing all of the online travel agents to close or merge(thus creating Expedia and Travelocity).

Many may disagree but may I be so bold as to state that with the exceptions of Hotwire and Priceline (that sell distressed inventroy) the airlines love online booking engines becuase it costs them less and people on average end up paying more for their tickets.

I am getting tired of people using 9/11 as an excuse. 9/11 was a very bad day but it did not change anything. The problems the airlines faced after 9/11 were there before 9/11. Many (not all) of the airlines and Boeing, used 9/11 as an excuse for the massive layoffs that took place. I admit the airlines did not ask for the shutdown of the entire airways system for 4 days but the US goverment did give them more than enough compensation for that. The airlines have been wanting to get out of the security business for a very long time. Now they have their wish. This cost transfer is going to be passed onto the consumer---that my frined, is the only real big change from 9/11.

Pan Am did sell its Pacific routes to United (with all of the planes and people who were assigned to them) becuase they were backed into a corner and had no choice. If Pan Am had the same domestic feeder system that United has, they would not have been in that situation. The lack of a feeder system is what doomed Pan AM. Why do you think the world airline alliances are so important to the airlines?

The two tier wage system I mentioned was for the gate/ticket agents--not the mechanics. This is a very common tactic used by management. It is called divide and conquor and happens all of the time.

Again I must stress that I am not anti pilot. Everyone in the airline industry took big paycuts in the early 90's becuase of the downturn in traffic caused by the Gulf WAR. At that time the airlines promised that when times got good again the airlines would make it up to them. Guess what, the airlines stalled and stalled and broke their promise. The pilots, after work slowdowns and strike threats were able to get a very good raise. The only thing the other unions want is the same percentage increasse in their wages and benefits.

I only mention the disparity between the pilots and mechanics wages becuase some people have posted that this is not the time for the mechanics to be making such big demands. If United is on the ropes, they should be asking the pilots to give back some of their wages to save the company. That would make much more sense then letting the mechanics go on strike.

You keep on thinking that I work for an airline. Sorry to let you down but I have never worked for the airlines. If you research all of my past posts you will see that I am telling the truth.

Not true I was hired in Sept. 1999 and recived UAL stock, I also recived all the same benefits as someone hired before 1993(both are covered under the same contract). I don't know where you got the 1/2 pay firgue it's not the pay cut my classification took.

I am glad that UA fixed the problem. Management even admited that it was a mistake. Two tier wage contracts have always been a bad idea.

We agree on the change in distribution and distribution costs. The airlines have done just about everything they can to shift the cost of distrubting their product on to the customer. Yes, they've tried to drive both traditional and online travel agents out of business. Smart travel agents of both types have changed their business model and survived. However, travel agents in general still issue over 70% of airline tickets.

The problem comes from the yield the airlines generate compared to as short as 2 years ago. As Southwest has grown, they've put fare pressure on the mainline carriers. At the same time, the mainline carriers themselves flood customers with e-mails and ads telling them that they don't have to pay too much for that ticket!

The mainline carriers have created a business model which no longer functions. Much like our income tax system, it relies on a small percentage of people providing the lion's share of the revenue. Unlike our tax system, airline customers have learned how to avoid the system. They now stay over Saturday nights, buy last minute "low yield" seats, and run afoul of the airline police by purchasing throw away tickets.

You state that these new websites to sell distressed inventory actually increase yield. If that were the case, airlines would report increased yields. They haven't been! All you need to do is look at quarterly reports to see that. That's a fact, Tango.

Your theory that the pilots should bear a bigger share of the burden because of their pay scale is flawed. It's very obvious that every employee group at UA is interested in protecting their own interests, and not in protecting the value of their investment. The employee groups at UA cannot work together to exercise their majority shareholder muscle and take control of their investment. How sad is that?

Your right, United probably isn't doomed, yet. They have the domestic feed to keep a few parts of the company profitable. But as more and more of that domestic feed becomes unprofitable, UA will continue to contract. That domestic feed currently needs a 90%+ LF to break even! How does a new mechanic contract like the one rejected by the mechanics help address this situation? As the domestic feed contracts, it will make it harder and harder for UA to maintain the yields on the cash cows.

United is on the edge of the death spiral. how do they pull away from the edge when the OWNERS keep saying that it is more important to "get theirs" first? Who will lead United back to profitability?

What are you talking about? At the time that the negotiations were going on a few years ago, we were looking at a booming economy and things looked good. Hell, things looked so good that the mechanics were willing to say, okay, take care of the pilots first and then come take care of us.

A recession is one thing, and if that were the only thing that was going on, maybe what the mechanics are doing would be okay. Unfortunately, the equation changed drastically due to the terrorist attacks. Now you weren't just dealing with a downturn in the economy, which airlines have dealt with for a while, you were dealing with a completely different thing -- people scared to fly because of terrorism.

You don't have to go very far to see that. Congress' airline bailout bill provided more cash to the airlines with the most expensive labor. Funny how that happened...