Merger questions

Everyone,

Here is a link to the Continental Mechanics Agreement http://rcfisher.org/Documents/IBTFINAL2005-2008.pdf

Here is a link to our current agreement
http://rcfisher.org/Documents/2005%20Agreement.pdf

If any of you would like, I can send you either file as pdf attachment.

If you have any questions on how a merger may affect us, please let me know and I'll get you the answers as best as I can. Thanks to a suggestion from Jock Creach in SEA, I've now added a link at the top of the page in case you are not at a computer where you have easy access to your email. The link will take you to a web form on my website and here is the link to that web post.

Take care,
Bob

Merger rumors

EDIT: It looks like there will be several of these articles over the next week with a possible deal announced soon. Rather than adding new posts for each article if I find a good one I'll add it to this post

An interesting overview here 4/30

Has this merger been in the cards for some time? Here is an intersting timeline from Morningstar. 4/30

The Tribune also reporting a predicted Monday announcement. link 4/29

According to the Wall Street Journal price has been agreed to at a rate of 1.057 shares to 1. Here is the link. 4/29

I've been speculating if an agreement is reached, an announcement would come Sunday evening, but according to Reuters a deal could be announced as early as Friday. Here is the link. 4/28

Continental Board in 'Positive' Talks With UAL: Report 4/28 More from Bloomberg here. 4/28. Looks like an announcement possibly over the weekend according to a "source".

Continental board to consider merger with United, here is the link. 4/27

It looks like a deal may be announced soon. Here is the link. 4/27

The hidden costs of a merger? Here is a report that United could be subject to a 500 million dollar penalty to the PBGC if the merger goes through. 4/26 EDIT: It appears this would be two 68 million dollar notes with 8% interest to be paid over fifteen years. If not paid off early it could add up to 500 million dollars.

For a little more detailed and rational look at the snag here is an article from Bloomberg. 4/26

The talks appear to have hit a snag over the stock pricing formula. Here is the article 4/25. At stake for either side is about 200 million dollars. Here is a little more detailed article on the matter.

Different perspective; JPMorgan analyst Jamie Baker now drops the odds to 40% that a deal will occur this year. Here is the article. And here is one posted on Reuters today 4/25 along the same lines. Of course these analysts discount the fact that if CAL jumps out of bed, more than likely USAir will be right back in the mix.

Here is an interesting comparison showing the current data of DAL, UA, and CAL. It is not new information, but the combination of UA/CAL would result in the country's largest airline.

Looks like things are progressing quickly with CAL. Here is the article.

Headquarters operations to be potentially split between ORD and IAH, article here.

Here is an article from Bloomberg sent to me by Allen Cosides from NY.

Feelings from the Houston Chronicle on the tie up can be found here.

Thoughts from Cleveland can be found here. Workers as well as the community fear reductions from this hub.

Fleet size comparison

This information was sent to me by Dave Saucedo from Seattle. The links to the page Dave found this data are at the end of the post. Blogger apparently doesn't support tables well so the number of each fleet is in bold.

United Airlines
Fleet age 13.8 years
The calculation of the fleet age can be truncated because it is only based on the Supported aircraft
Aircraft Number Age Airbus A319 55 10.3 years
Airbus A320 97 12 years
Boeing 747 24 15 years
Boeing 757 96 18 years
Boeing 767 35 14.9 years
Boeing 777 52 11.7 years
TOTAL 359 13.8 years

The calculation of the fleet age can be truncated because it is only based on the Supported aircraft

Continental Airlines
Fleet age 9.2 years
The calculation of the fleet age can be truncated because it is only based on the Supported aircraft
Aircraft Number Age Boeing 737 32 14 years
Boeing 737 Next Gen 196 7.7 years
Boeing 757 62 11.3 years
Boeing 767 26 8.8 years
Boeing 777 20 9.9 years
TOTAL 336 9.2 years

The calculation of the fleet age can be truncated because it is only based on the Supported aircraft

This was found on following sites. (home site is http://www.airfleets.net/ )
http://www.airfleets.net/ageflotte/Continental%20Airlines.htm
http://www.airfleets.net/ageflotte/United%20Airlines.htm

Moving fast?

Looks like things are progressing quickly with CAL. Here is the article.

Language matters

Brothers and Sisters there have been several posts on this blog explaining why attaining strong scope language is so vital to us. I have just been forwarded a Judgment and Decision in the case of the Teamsters vs. Frontier/Republic where the carrier attempted to shift bargaining unit work to non-union divisions. The Teamsters won and the Frontier mechanics and stock clerks will be restored to the status quo as it existed on February 24^th of this year. Here is a link to the Judgment, and here is the Decision.

Again strong language is crucial to our continued employment, and people telling you otherwise have an agenda.

Weekly report 4-18-10

General Items

I took vacation this week to deal with a family issue so this report will not be long.

Before vacation, Tom Reid shared some handbills that were posted on the Union bulletin board. These handbills used a David Letterman style top ten list to describe things that the IBT has done (or more precisely not done) for us in the last two years. They were obviously authored by someone that either lacks insight into the process, or who has an agenda of creating for himself a one hundred thousand dollar job in another Union. These flyers appear to have originated in SFO. The reason I bring the flyers up is someone is trying once again to sell us a "bill of goods". In these unsigned missives, we are presented with the proposition that better language is not needed, just get us the money. Is the loss of over ten thousand mechanics not enough to establish for the author the need for improvement to our current scope language? To this point, the pilots at Continental have been offered the Delta pilots agreement, which is substantially better pay wise, so Continental can get out of certain scope provisions regarding joint ventures. In addition, the AFA at United has been offered the Continental Flight Attendants agreement for similar reasons. Here is a link to UAL's April 5^th update to the AFA membership explaining that the Company has no problem paying more money, if the Company is given the right to greater flexibility, which is given by the IAM in the agreement with the Continental Flight Attendants. In seeing that strong scope language is worth enough for these Companies to try to buy their way out of their agreements, how can anyone say that language doesn't matter? Will the author, or his followers, work to put the mechanics at this Company in a position to continually bargain from a position of weakness? It certainly seems that way. I don't think they realize what they are helping this Company to accomplish at our expense. At least that's what I would like to believe. The alternative, that they are in collusion with the Carrier to do us economic harm, is just too hard for me to fathom. Like you and the rest of the rank and file negotiating committee, I make the same wages as described in Schedule A of the CBA. After a year with no overtime, I certainly could use more in the form of wages. Along with the rest of the committee, I am still committed to achieving the high priority goal of improved wages. With that said, I have enough seniority that I'll probably be here for a while if we fail to deliver a decent scope clause. However, if during a negotiating committee vote, I agreed to keep the current scope language to get a little more money than we would have otherwise gained had we not improved our job protection language, and then afterwards lose many more mechanics, what does that say about me as a Representative, or for that matter as a person? There are so few of us left that we are not talking about agreeing to force people to the streets that we don't know when we say forget the language, get money; we are talking about our friends and their families. We lived under that concept for more than fifty years and I'm sorry, but this premise of continued language degradation for insignificant short term gains really infuriates me.

Another section of the flyer says "nothing". I strongly beg to differ with this point. While still in Section Six bargaining, the membership achieved a huge improvement in the Joint Board of Adjustment. With the establishment of the Joint Board (another language issue), in lieu of the third step of the grievance process, several members have been returned to work in months, rather than years, as a result of this faster procedure. There have also been many settlements and resolutions of third step grievances, both utilizing the board as well as settlements before reaching the Board, that date back to 1999. This is a huge improvement, speeding the grievance procedure, which the membership has been seeking for decades, and has now been delivered by the Teamsters. Language is crucial Brothers and Sisters, and any one telling you differently has an agenda.

It appears our hopes may be coming to fruition as far as a merger with Continental are concerned. This article tonight from Business Week seems to indicate that USAirways talks are being held in abeyance while United and Continental exchange financial information. According to the article we should know in a couple of weeks the direction these companies will take. Jock Creach from Seattle posted an interesting breakdown regarding the three carriers and that can be found here. As I've said in previous posts it looks like it will be an interesting summer with all the changing dynamics.

MM

There were a couple of grievances filed in regards to personal choice of physician language in Article XX. Several members have been denied the right to chose physicians in their home states, and these grievances will be processed to the second step. This issue is similar to a Joint Board case that I am currently prepared to present regarding the reasonableness of the application of the Article XX language. The option of making this a companion, or sister, grievance was offered, but one of the grievants felt their grievance was sufficiently different, and therefore, combining the two issues would not provide an adequate outcome. In respecting that member's wish, I will start this grievance at the second step and wait for a future JBA slot. A part of the case will certainly be the Virginia Workmans Comp legislation, which provides a base of the panel doctors, but no restrictions on personal physicians provided previous arrangements have been made. Here is a link to the Virginia statute for those inclined to read it.

According to one of the Stewards reports, after conferring with management, a member's discipline level was removed without going through the grievance process. Another Steward reported no answers to several grievances and they will now be elevated to the second step for resolution.

GQ

I came in on Tuesday for a couple of hours for a meeting with members of management from Chicago and Dulles as well as Stewards Joe Filice and Jay Obst. This move is seen as a positive change, and the Teamsters are committed to ensuring that through an approach of working towards the mutual goal of success of the shop, it will not just survive, but grow. Excerpts of Jay's write up of the session follows;

"To the GQ guys out there this should be look upon as a good move, Ames explained. No longer will we have to have every part we request scrutinized by local station management only to have our request denied.

Ames told us their extensive maintenance strategy planning has been in the works for some time now but only recently implemented into the line stations with positive results. Ames also pointed out the importance of a collaborative approach utilizing our employees' knowledge and experience to produce an effective, well developed maintenance program. With realized success in lower operation costs and greater productivity in the line stations, WHQGQ is now anxious to include the Hubs as well.

Getting our own department in order is the initial goal and the future GQ, Ames said, we want to expand to in-source work and looked upon by other carriers as their first source for their ground equipment maintenance needs.

Their plan was obviously well developed and not something just thrown together. It contains logic and some good business sense. It is also something that has been absent from our process for some time, Positive Direction.

As others will participate in future GQ planning sessions we should hope that our current contract negotiations will secure strong scope language that allows us to be the ones participating in the new maintenance strategy.

Jay Obst"

PV

The Stewards in PV will be out for training this week according to their report. Several issues are still being addressed including the application of the vacation rules, a bypass for a member of another workgroup performing PV work, as well as some outstanding outsourcing issues.

That's all for this week,

Bob

Another merger article

EDIT: Here is a link from the Chicago Tribune stating that CAL is in serious talks with United.

Here is an interesting article by Vaughn Cordle posted on Seeking Alpha. He goes through what he sees as the logic behind a deal with USAirways. The author advises that Labor should go along as it is difficult to attain gains when negotiating with a company that can't make money and the merged entity presumably would. I like to think I take the long view on things, unlike how the author characterizes Labor; however a UA/US merger could leave those of us in DC as well as the employees in the other 14 overlapping city pairs getting ready to move, or lose our jobs. As many of you know in the last proposed deal the DC area was a big problem as far as market saturation was concerned. Knowing that more than 70% of passenger traffic through Dulles is connecting, it is not difficult to assume that with the new facility in Philadelphia, passengers could connect through there just as easily. Add to the mix that Senator Specter from PA would go ballistic if the merged carrier decided to move operations from Philly to Dulles, and you can see how this could be a huge issue for our three hundred members as well as the thousands of others currently employed in DC.

I want to see the airlines return to profitability the same as anyone. As the author of the article correctly assumes, a profitable company is better for all concerned. I disagree with him however that a UA/US merger would greatly benefit the employees. In fact I see this deal as requiring more pain from an already over taxed workforce. The author assumes a five to ten percent increase in wages if a deal goes through. That is no great reward for the pain required to complete this deal.

I think that a UA/CAL deal makes far more sense for the companies as well as Labor, as do most analysts and the author of the above article, and I hope this is the direction these companies ultimately take.

Agreement needed

If any of you has a copy of the USAirways 2008-2011 CBA, I would appreciate if you could send it to me. I'm trying to keep the library on the website as current as possible, and with the merger rumors it is in our best interest to know what's in the new CBA.

Also, if you have old Eastern, Pan Am, or other historical Agreements I would like to add them to the library. Obviously scanned or electronic copies would be the preferred format for these old CBA's. If you know of a current Agreement that I've missed, I would appreciate your feedback,.

Thank you,
Bob

Weekly report 4-12-10

General Information

It's been some time since the last report as I've been having difficulties with my email program. I recently upgraded my Yahoo account so hopefully these problems won't continue. I've attached a few documents to this report and they will be available on the blog via the website soon.

The first two documents are the arbitration decision and the Union's dissent. I felt last April that the Union did a good job presenting this case and I still feel that way even after the decision. I'm sure you're questioning now why I feel that way, especially since the arbitrator ruled that the Company didn't violate the agreement. The reason for this is the reading of the arbitrators decision on pages 12 and 13 which states; "On the other hand, the Union correctly contends any third party on-call maintenance at EWR or PHL in situations which are not an emergency should not be excluded from the -13- protections in Article II.D.5. The work at issue in this case includes not only the initial inspection of open log book items and repair as necessary to clear those items so a flight may depart, but "easy, simple fixes" of deferrable items [TR 277:5-278:7]. Unlike on-call maintenance necessary to resolve open log book items affecting flight schedules, there is no evidence in this record which supports the notion that discretionary non-routine maintenance on such aircraft can properly be considered emergency work when performed merely for convenience. Otherwise, the parties' inclusion of "emergency" as the modifier of "on-call" in that sentence would have no meaning. For this reason, the performance of non-emergency deferrable maintenance by third party vendors at EWR or PHL cannot be sheltered from the job security protections otherwise afforded by Article II.D.5." The arbitrator left it to the parties to determine the remedy. Based on this language, in my opinion, he has given the Union a solid position to recapture this work. In other words the arbitrator ruled that the vendors can be utilized only to defer items to continue to a maintenance station. I urge you to read both the decision, and especially the dissent.

EDIT: Here is the Dissent, and here is the Arbitrator's decision

The next attached document I think can be attributed to Karen Asuncion from IAM District 141. This is obviously a campaign document for the upcoming District elections, and I wouldn't normally include it, but it brings to light some interesting items regarding the cost of maintaining a District Lodge. Of note, the author of this piece claims the District has outsourced the duties of the Secretary-Treasurer, yet continues to pay him his salary of over 100k dollars. In addition, each AGC makes over 100k. I bring this up because some folks in SFO are trying to organize the IAM on this property and have promised we would have our own Locals and District. I talked about this before, but I think it bears repeating. Were we to go down this path, under the IAM there would be a little over 3 million dollars to spend annually nationwide. Of this amount, if we used similar staffing of IBT reps handling the unit, which is more in line with the stated IAM goals, we would be spending close to half our money on District salaries, and that doesn't take into account AFL-CIO or Grand Lodge per capita tax. It also doesn't take into account Local salaries, conventions/conferences, Local expenses, and also negotiation expenses. The other big item discussed in the document was arbitration and its costs. Fortunately the IAM doesn't use attorneys in arbitration, or directly at the table for negotiations, so we would be able to save some money in those areas. My guess is if we chose to change representation again, we would be able to survive, but not in the manner the old Local 9 guys are promising. Reading the document, I can understand the anger in 141, especially in light of the District President's mandated (without a membership vote) sick leave point system that was recently implemented. "No fault" sick leave programs are definitely not the best for employees, and to date, I haven't heard of one being instituted by the IBT without a vote. Do you figure those fellows from old Local 9 have been promised 100k jobs for delivering us over?

EDIT: Here is the referenced campaign document

I was going to discuss the pension survey and petition I recently saw, but in light of the fact that in an un-scientific poll, less than 8 percent of the membership participated, why bother. I'm sure you could get 8 percent of any group to say they had strong feelings about any issue either for or against, without reflecting the majority opinion using the same metrics that were used to achieve these results. I will say this though, growing up in Pittsburgh PA, in a strong union atmosphere, (most of my family and friends belonged to unions) I wouldn't dream of committing the treasonous act of betraying my Brothers and Sisters by becoming a Company stooge, and undermining negotiations.

I know this is getting long, but because of the merger rumors, I think it's important you have this information. Carlos Barrantes from SFO sent this article to me a couple weeks ago. It is from Reuters and discusses the foreign ownership piece of the European "Open Skies Agreement". This issue hasn't been widely discussed in the States, but I'm sure it will affect us quickly if enacted. On a related note, I posted in January that USAirways was a potential merger partner, but I'm still hoping CAL enters the mix as they are definitely the better partner.

I'm going to close without the usual department reports because of the length of this article. I'll resume those next week with some additional inputs. We've started a weekly shop stewards conference call and they have been very productive. The stewards have agreed to give me a briefing of the items they've worked on during the week, which may have been resolved without grievance action, so that you can get a more detailed report.

That's all for this week,

Bob

Here’s a twist

Will CAL make a bid for United? Here is one article speculating that may happen.

Happy Easter

I would like to wish you all a very Happy Easter.

WCT Pension news

The 2010 actuary's letter on plan funding status and funding certification is out. The fund remains in the green zone at 89 percent. This is up from the 2009 status of 84.7 percent. The funding status letter can be found here.