LEC 99 Update
 

July 24, 2007

LEC 99 Update

Ladies and Gentlemen of LEC 99,

As we approach the start of the balloting for the FDA LOA, I would like to share some of my thoughts with you. I hope that after educating yourselves on the many aspects of this proposal, you will consider voting against ratifying this LOA.

I feel a certain level of frustration when the company puts information out in which they imply that the union was involved in all aspects of developing this proposal, as I am reasonably certain that no one from the union visited Paris or Hong Kong with company officials for the purpose of fact-finding. In my opinion, it is misleading to the pilot group when the company makes such statements.

I am also confused about some of the statements surfacing lately on how we ended up with the enhanced option. We ended up with this package because that is what the company offered and we took it. That’s it. I don’t recall the company starting any lower or the union countering any higher. With regard to being based in Hong Kong, I think that we are going to be based there because the company wants it that way. Why? That is a question that only the company can answer.

When I started doing MEC work, I understood that even though I was the SFS representative, my job was to work for the betterment of the whole pilot group. Clearly the demographic targeted with this LOA is not 4,800 pilots. I think that is disappointing, and that is why I can’t endorse this LOA. I would like to think that the phrase “no one is left behind” is still the way we do business, but that is for you to decide.

In his e-mail to the pilots, Mr. Lewis writes about some of the facts of this LOA as he sees them. I think we need to expand on a few of those facts.

·Housing Allowance¾Much has been made of the fact that the intention was for the pilot to add whatever he was spending on housing back in the U.S. to the $2,700 U.S. allowance in this LOA to be able to secure adequate housing. The problem is that the company is selling this as a two-year temporary “adventure.” In that case, most pilots will still be paying some kind of mortgage back home. Most of us in SFS do that for tax purposes anyway. Of course, you can rent your house but I think for that short period of time most people will not. Now you are faced with paying a mortgage and coming up with money out of pocket (without equity) to be able to provide decent housing for your family in CDG or HKG. That’s why I think that $2,700 U.S. is not sufficient to provide a fair benefit.

·Seed Money¾Mr. Lewis says that the seed money is to buy things like bed sheets, cleaning supplies, and small appliances. What about furniture? When we visited Guangzhou, we saw fully furnished and serviced apartments, so $10,000 U.S. would have been adequate there. The problem is that it is expensive and difficult to find apartments in CDG or HKG that are like the ones we saw in Guangzhou. Also, what about the two- to three-month deposit and the agent’s commission to secure an apartment? I think the 79 credit hours times your hourly rate or $10,000 U.S., whichever is greater (current CBA relocation allowance), would have been more appropriate.

·Shipping Allowance¾500 pounds . . . are you serious? Mr. Lewis says that they “guessed” that amount. Well, it is obvious that somebody forgot to tell him that we would need more weight in the allowance to be able to furnish a place since the seed money is not enough when you can’t find fully furnished apartments at a reasonable price. How much more do I think is reasonable? I think about 7,500 pounds would have been a more sensible number. That is about how much I brought to SFS, and my apartment is about the size of what you can expect to get in CDG or HKG (1,300 square feet).

·Schools¾I understand the company’s reluctance to pay for very expensive education without knowing how many children they would have to pay for. I think the answer is not to ignore that benefit completely. The reasonable approach would have been to subsidize the tuition to a certain percentage per child and maybe cap the total that will be paid. I am reasonably certain that the vast majority of pilots would have found that acceptable. I agree with Mr. Lewis that school is a personal choice. You can choose private or public schools if you live in the U.S. I think he is wrong trying to compare the choices one has in the U.S. versus the FDAs. We have very limited choices in CDG and HKG without the support of the company.

·Transportation¾If the company does not want to ship a car for only two years, I think that’s fair enough. If that is the case, why not provide some transportation allowance instead. Perhaps that would allow you to add some personal funds to the allowance and pay for the lease of a car. If you don’t want to do that, then you can use that money for all the public transportation that you and your family will require.

Certainly there are other issues, but I think these are the most talked about deficiencies in this LOA. I personally think that a package that offered $5,000 U.S. monthly, to include housing, schooling, and transportation, would have been the minimum required for an average family of two adults and two children. My guess is that’s pretty close to the “ex-Pat deal” the guy in the office will get.

I think it is rather telling that the voting has not even started and the company is already modifying their stance in various subjects in the LOA in response to our reactions. If their “intent” is to inverse people to an FDA for only one month using the STV clause, then go ahead and put it in writing. If they are going to give us the seven days to move, like the current CBA option, then go ahead and put in writing. Even the remail, that has been so important for us in SFS, needs to be put in writing. Please forgive me if I don’t have enough trust to be comfortable with verbal assurances.

Mr. Lewis is absolutely correct when he says that the FedEx pilots are the best option to do the FedEx flying. I think we all share that sentiment. We have proven over the years that we can do international flying very safely and reliably under some very tough conditions. To me, that means we do have some unique skills, perhaps more skills than a guy sitting in an office.

Fraternally,

Captain Edgar Irizarry, Chairman
FDX Council 99

[quote=iarapilot;201124]July 24, 2007

LEC 99 Update


I am also confused about some of the statements surfacing lately on how we ended up with the enhanced option. We ended up with this package because that is what the company offered and we took it. That’s it. I don’t recall the company starting any lower or the union countering any higher. With regard to being based in Hong Kong, I think that we are going to be based there because the company wants it that way. Why? That is a question that only the company can answer.

When I started doing MEC work, I understood that even though I was the SFS representative, my job was to work for the betterment of the whole pilot group. Clearly the demographic targeted with this LOAis not 4,800 pilots.


I really hope that all that are eligible to vote will read this.

And I sure hope that it was a typo on Edgar's part b/c if we took what the company offered w/o a counter, then our UNION surely has lost their way.

Can I vote NO again?

Good on Edgar for having a sack. Glad he has the candor and guts to speak out. The last thing we need on the MEC is more yes men.

I have said it before, one of the reasons the company prefers HK is the 16% vs. 49% tax rate difference. The numbers are significant and should have been analized by ALPA before the NC signed off and before the MEC voted.

But like everything else with this LOA the attitude has been: It is more then we get now so we will take it.

Anybody think the company hasn't figured this table out? Anybody think the MEC independently got these numbers?

XXXXXXXXXXXXXXEstimated Tax Equalization Benefit

Income...............HK..............CAN..............CDG
100K
150K
200K
250K
300K

Tax equalization was/ is NOT to be a Monetary Benefit for Gain but rather a benefit to minimize TAX burdens to expats. In other words one should not be expecting to MAKE MORE.

Simply put, TAX equalization pays the difference in Taxes both to the US and Foreign governments on your "Taxable income" over what you would pay the US government as if you still lived in the US.

With the Tax equalization, one will not further benefit from the first $82,500 as that will be incorporated.

The money that the company pays both governments on your behalf taxes, will also be taxed as income
To simplify it (if that is possible with tax issues), if you Normal US TAX is $25,000 and your foreign Taxes obligations are an additional $15,000 USD, the accountants will figure your gross income with all benefits and see what you would have paid as a resident of the US and any additional tax burden to other goverments will be paid by the company.

In the example above the company would pay 15,000 to the French or HKG government on your behalf, but that 15,000 they pay will be figured into your gorss w-2 for tax purposes. So you will be paying taxes on the Taxes FedEX paid on your behalf.............Simple??

So pilots should not expect to "Make out on taxes", they just won't have to bear the Buren of paying additional foreign taxes.

Also you should check with you individual States because each state handles EXPAT taxes differently. SOme States forgoe any state taxes to Expats, others will still tax you as if you still reside there.

Good bad or indifferent,

The

Sorry, but I gotta raise the BS flag here. I’m not advocating voting yes OR no, I would just like people to have the FACTS to decide, not misinformation...

First – count how many times EI uses the phrase “I think” or “I feel” vs. “I KNOW” – doesn’t sound like he really has ALL the facts now does it?

Second – EI - “With regard to being based in Hong Kong, I think that we are going to be based there because the company wants it that way.”

Maybe this other guy (NC member) might KNOW why HKG...from his letter:

MH - “At the urging of our committee, the LOA bases the pilots in HKG rather than CAN, even though the actual operational base is CAN.”

EI - “Why? That is a question that only the company can answer.”

How ‘bout that the union guys got over there and saw the place for the she-ite hole that it is and URGED the company to base us in HKG vs. CAN?

Third – Housing Allowance, Seed Money, Shipping Allowance – all EI’s arguments here are debunked with just a little internet research – here’s a 1-bedroom apartment in Paris (a couple of blocks from the layover hotel) for 1900 Euro FULLY FURNISHED – with MAID SERVICE

http://www.parisattitude.com/apartme...numProduit=109

Still available as of this posting.

etc. etc. etc.

Blasphemy, I know, to all you Subic guys, but the facts are the facts.

Flame away, but PLEASE VOTE.

deleted.......

you guys should make sure to mass-email this LEC 99 update to every fedex pilot you can, it's a great, non-emotional, factual approach to the LOA.
good luck everyone!

Once again, you are missing the point!!

FDXLAG is saying that the COMPANY prefers HKG over CAN, for tax purposes. They(the company) would have to pay $66,000/yr less, under the tax equalization plan.(for a $200,00/yr pilot)

WooHoo! A 600 sq.ft 1 bdrm apartment for $2625(US). Good job! I think you just made EI's point! And, we all agree that HKG is even more expensive than CDG. Don't we?

Also, no kitchen. You found a real winner. It is basically a hotel room. Nothing like staying in a hotel room for 2-3 years. Again, if you have kids where are they going to sleep?

Actually, there is a kitchen. Small. But, there is a kitchen.

Wowee, all of 603 square feet for only 1910 euro. That plus you pay additional 10% agency fee and electricity and gas bills. Do the conversion it is $2900 before utilities for less than a single wide trailer. That may be good enough for you but the union is supposed to represent all 4800 of us.

About you commenting on Edgar saying "I think" or "I feel". How many straight answers has the MEC or company given? Most of their answers are "it should, the standard will be, I don't know" or "trust us"!!! This is where the BS flag should be thrown!!!!!!!!!

Actually, there is a kitchen. Also, it's a 600 square ft apartment for $2640 (USD) not including agency fee or utilities. However, it's only a 1 bedroom. Good if it's just you, but most wives wouldn't want 2 years in a 600 sqft apartment... Look at the 2/3 bedroom apartments and the average rent is $4000-$7000 per month not including agency fee. This also doesn't include utilities. Just the facts.

What Busboy said, and

I am not looking at it as a monetary benefit for gain. I am looking at it to evaluate the LOA package. Do you think the company hasn't figured out what it will cost? Shouldn't the Union figure out how much it will cost fred? Shouldn't the voters have some knowledge of total package costs? While we are not playing poker; it is ok to ask to see the hole card. It is even better if you count the aces on your own.

Tax Equalization is a very good part of the package (and necessary for CDG or CAN). The more senior you are the better it is.

Win - Win!
 

So, what YOU'RE saying is that it's a WIN - WIN! (as far as tax equalization goes)

The Company wins by paying less for YOUR taxes (to HKG vs. CAN govt)

And we, the pilots, win because we don't have to live in the she-ite hole that is CAN and we can live in HKG instead!

I'm a little fuzzy on exactly what's wrong with both sides benefiting here?

or are you guys thinking the company should offer us all that tax savings as a lump sum cash payment to us for the 'sacrifice' we made by living in HKG vs. CAN?

Assuming an 1800 sqft apartment as a min for a family, the minimum price I've found so far in Paris is $6000/month excluding agency fee and utilities.

Obviously, it's a win-win.

But, in your "raise the BS flag" post, you insinuate that EI is putting out misinformation.

We are just trying to point out that the company has some incentive for basing us in HKG other than just being "urged" by the NC. That incentive is $66,000/yr in tax savings per capt. Pretty substantial, even when you deduct the ground transport costs.

OK, the company saves some money, and pilots (I don't say we, cause I have no intention of bidding it, either way) don't have to live in some Chicom ruled sh$$$$le. So what? Either way, you pay no more tax than if you reside in the US. Is the point to make the company spend money needlessly?

No the point is the MEC & NC think we should kiss the company's arse because they gave in and put us in HK. I am simply saying why the company was chuckling when they said OK but it will cost you invol STVs.

Hong Kong is good

Tax Equalization is Good

But know what you are getting before you decide what to give up.

Do you think the company hasn't figured out what it will cost? Shouldn't the Union figure out how much it will cost fred? Shouldn't the voters have some knowledge of total package costs?

You are probably correct - "most wives" would not (mine included) - but some might?

Glad we're finally talking facts on here vs. hypotheticals though.

The apartment ad I linked was just one I found after about 5 minutes of surfing. Also, it is in the heart of downtown Paris - only a few blocks from the Champs d Elysees. The further out from the heart of the city you get, the less expensive the rent and the bigger the places.

This example was only intended to demonstrate how quickly/easily (if someone wanted to) EI's arguments could be debunked with a few clicks.

I'm not sayin'.....I'm just sayin'......

As for HKG - you can do the same thing here:

http://www.hongkonghomes.com/

This site even has a picture of an 'expat' family on the home page.

My point is only that one could argue (with information like this) that, contrary to what EI might have you believe, the LOA "Enhanced Option" might actually be "sufficient" for a short-term (2 year) commitment......isn't that the purpose of that option in the first place - short-term option?

So....what you're saying is that all this LOA "cost" us (the pilots) was granting the company the STV option?

And we get all the "stuff" in the LOA for granting the possibility of being non-vol'd somewhere for up to 3 bid periods with full per diem, hotel....etc.....etc....ummm.....

Where's the down side to that again?

Who cares how much it cost Fred, or even why they're offering it (conspiracy theorists)?

You're saying we're being oferred a whole lot of "something" for almost nothing.

I agree.

Caveat - if the STV were to Darfur or Bagdad, etc. (as has been hypothesized on this site) THEN it might be a HUGE cost for the pilots - but it's not - it's HKG and/or CDG.

AFW,

No one says this has to be a windfall for the pilots. But it shouldn't be for the company as well. If you want to live in a 600 square foot apartment (more like hotel), good for you. You probably won't need more than 500 pounds of stuff in that place. Most of believe in a higher standard of living. Look at it this way, you can move over to Paris and live in your cubicle if/when the company decides to open the domicile under the current CBA. I am not sacrificing a chance at STV for you to get $2700 bucks a month.

The company has found two of the most expensive cities on the planet to base pilots. Most of us think that there should be more reimbursement from the company due to this fact. If it cost the company extra money, this my friend, is the cost of doing business. If they can't (or don't want) to afford a little more, then maybe they need to consider plan B.

Yes the expat family on the home page of Hong Kong homes. At least they got a decent package and can afford to live in something more than a 600 square foot ****hole.

Sorry AFW, I don't care where Fedex "invols" me, I choose to live where I please. If they want me to be gone 30-90 days, then pay me trip rig and then we can talk business. Something like 172 hours/month plus per diem and housing....

Their deal is beyond cheap...

Sorry pal, but cost neutral is not a win-win for us.

AFW_MD11, "Caveat - if the STV were to Darfur or Bagdad, etc. (as has been hypothesized on this site) THEN it might be a HUGE cost for the pilots - but it's not - it's HKG and/or CDG."
Spoken like a man with no kids in school or a wife who doesn't work. For the 75% of us with either of those, getting forced to spend 3 months away from the family is a "HUGE" cost. If I didn't mind being forced to be away from my family, I'd probably still be in the military. I'm not- I'm a civilian airline pilot. And I'm not in favor of allowing Fedex to become the ONLY airline in the U.S. who has the option of forcing crew members to leave their homes for extended periods of time (30 days is too long) against their will. To top it off, we would be stuck for up to 15 days a month away from home for only per diem! YGTBSM!

I never said I want to live in a 600 square foot apartment - I don't think I could fit myself, wife, 4 kids and 3 dogs in there. (sidenote:...IMHO the apartment ad in Paris didn't really fit the definition of ****hole - but to some it might.)

Most of us who believe in a higher standard of living probably won't bid this if/when the LOA passes either (myself included)

I am saying, however, that I might be willing to "pay the cost" of the possiblity of a non-vol STV assignment (since that's all I can see that it possibly might cost me) so that others who might want to volunteer to live in a 600 square foot apartment in Paris (or HKG) for two years can get a little extra "help" than our current CBA offers them to do it.......might be willing to......possiblity of.....

OPINION: I personally agree with the folks who say it probably will never come to non-vol'ing people - so I believe that even further reduces the risk/cost to me to support this. For the record I HATE being away from my wife and kids for even a week or more. I just don't see it happening, but I might be willing to roll the dice to get the gains (yes, gains) that the LOA offers.

.....I haven't voted yet......

(or they can choose the regular 3-year CBA option too and get tax equalization too - their choice again)

Doesn't seem to be such a big sacrifice for me, and a pretty "good deal" for someone who WANTS to bid it......that's all I'm saying......team player all the way baby!

"Simply put, TAX equalization pays the difference in Taxes both to the US and Foreign governments on your "Taxable income" over what you would pay the US government as if you still lived in the US."

I feel that I need to clarify this tax equalization....the way I read it. It seems that a lot of folks DONT understand it. First, there is no reason to pay the same taxes as if you were in the US, because you ARE NOT in the US, and you are entitled to an $82000+ exclusion, after meeting certain criteria. Now, I agree that with CDG it will be to ones benefit. But in countries that will tax you at a lower %, you could be better off without the equalization.

Take SFS. An FO, married with two kids, no property in the US, no gains on any investments, will pay around $3000 federal per year. That is because he first takes his income, say $150K, subtracts his $82.4K for foreign earned income exclusion, that leaves $67.6K. Then he takes out his housing deductions and others. The number you come up with is what you would pay taxes on. If SFS had the equalization BS, we would be paying a lot more than we do!!!!

Now, HKG is around 17% tax on your income. At $150K, that is about $25,000 in taxes you pay to the HKG government. Then, you would pay Uncle Sam the same as you would in the paragraph above. That amounts to a total of $28500 in total tax liability.

Now, throw in the tax equalization into the pic. The company gets the credit for your foreign earned income exclusion (82,400). YOU LOSE THAT DEDUCTION, THE COMPANY GETS IT!!!!!! Basically, if you would pay taxes on what you would have in the US, as far as HKG goes, I think your taxes would be more than if you didnt use the equalization. But, as I said, with countries that have a higher tax rate, you would be better off with the equalization.

Hopefully, I have explained it in an understandable way.

AFW,

Don't confuse being a team player for someone willing to take a crappy deal. Both FDAs are ultra expensive and if the company wants to place pilots there, they need to spend some extra money. It really is that simple.

If you want to be a team player, then think about voting NO.

Here is why:

I think we can get a better deal if we work together. Renegotiate the LOA, improve the money involved and clear up the details. This is the most vague LOA I believe I have ever seen. Contracts should be clean, this one is absolutely not.

If the company elects to fill the FDAs under the current CBA, we all have an opportunity to bid it. If people choose to be "team players," then we won't bid it. Of course this won't happen, so those folks choosing to go under the current CBA get what they deserve. If they want to be team players, then a better deal will happen.

Give the union some "leverage" and vote down this turd....

Every SIBA bid we have had resorted to inversing pilots initially. :eek:

Not a risk I am willing to take!!

I doubt if Non-voluntary STV will occur. Talking to a few senior MD drivers(first page), they are drooling about the MD in HKG in a couple of years and GETTING to bid STVs. I will probably not be able to hold it.:( IF it would get to the non-voluntary situation I believe JL's letter to limit it to 30 days makes sense.... Why would the company try to schedule a 90 day stv when a sick call would screw up the works? AFW - Good on ya for trying to bring some rational thought to this discussion.:)

I was using the term "team player" in the context of helping a person who WANTS to bid these FDA get MORE than our current CBA offers by voting for the LOA (not intending to bid the FDAs myself).

"Team player" in the sense that I appear to be making a huge sacrifice so that those who are willing to bid the FDAs under the LOA package can benefit from it's provisions - all the while not really costing ME (the "team player";)) anything but the (what I consider to be remote) possiblity of a one-bid-period non-vol STV.....yes, I actually BELIEVE the company when they say 1 not 3 - blasphemy, I know.

and...don't get me started on how much more "leverage" the union will have if we vote this down - (IMO) zero.

I'm convinced there will be no more offers - some are convinced otherwise....either could be correct...only time will tell......my crystal ball broke a long time ago.

AFW,

You're right, they win b/c the company has gotten you to actually believe that a smart business decision on their part not to pay more in taxes and more in infrastructure costs for a compound in CAN is the result of a negotiating win on your/our behalf.

Quite an assumption. That's a lot bigger than the last apartment (3 bedrm) that I lived in prior to buying in Memphis. It was 12-1300 sqft

You mean...Before you had a decent job?:rolleyes:

How many people?

AFW,

I actually DO want to bid CDG. Please don't vote for this LOA on my behalf. It's substandard and a company that makes $2,000,000,000 per year in profits can and should do better.

AFW here's a thought for you, the company can inverse me to siba right now. I can handle 14-17 days away from home for three months. I get to come home, I get to ride 1st class over and back. The STV, I don't get to come home. I don't get to see my wife and kids, and obtw, I have children that can't come oversea's to visit due to special needs. For me, and anyone else at this company that is junior in a seat, vote no. Don't give the company the power to send someone away for up to 100 days. That's a work rule that we fought hard in the contract to get rid of, junior manning. If you choose to go, fine, but don't get me involuntarily sent.

Please vote no for that reason, amidst the many other reasons that are out there.

Haywood.

AFW, I too would like to bid this FDA but because it is so low with no help for education I will be unable. This LOA was written for 1/4 of our crew force, The empty nesters and the single people, it wasn't written for the whole crew force. Are we a union for only 25% or are we a union for all 4800 of us.

Vote No for those of us who want to go.