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MaxKts 07-31-2007 01:31 PM

This answers it all
This is an excerpt from the LEC 79 latest email

STVs. All the talk about STVs pertained to opening Paris (not HKG) because CDG is being opened up with new airplanes. 757s delivered at the same time pilots are going thru training. In the event of bust, etc, then FDX could STV. Bob came up with the idea – hotel, per diem, families, thinks it’s a great idea. As far as inverse seniority, Bob doesn’t think it’s going to happen. Bob feels FDX is not going to take a new hire and send them over; the likelihood of an STV for HKG or CDG is not going to happen. If it does it will go senior.

Now I understand why he is so defensive

fedupbusdriver 07-31-2007 01:50 PM

Could you post that entire email if possible. I read his latest update , but it did not have that wording. Bob's idea huh?

MaxKts 07-31-2007 02:05 PM

The 79 Snippet
July 2007

Many of you have asked what I personally think of the FDA LOA (verses the ALPA line). The long and short of it is that my personal belief on an issue does not affect my ability to represent you nor address your concerns. Guy, Ron, and I have been besieged by your questions and opinions pertaining to the FDA LOA. Hopefully the following notes will shed some light on any issues regarding the LOA, helping you make a well-informed decision. My sincerest apologies in the delay (beyond my control) publishing these notes.

When I first heard of the LOA I was excited about the prospect and believed it offered many benefits above the CBA. Heaps of negative info, comments, and questions followed on a myriad of aspects of the LOA, including the lack of an education allowance, the ‘inadequate’ housing allowance, and how the STV provisions could be a bad deal for junior pilots. I was undecided on how to vote, able to talk myself into voting YEAH or NAY on any given day, eagerly searching for more information.

After attending our LEC meeting July 19 with special guest Captain Bob Chimenti, ALPA Negotiating Committee Chairman, I have resolutely decided to vote ‘YES’ in favor of this LOA. After listening to Bob’s presentation, I now firmly believe that the Scope and RLA protections, as well as the flexibility and compensation of this LOA are better than what we currently have under the CBA-which has no provisions for any housing allowance, education allowance, tax-gross-up, nor STVs (for FDAs except as provided under SIBA.)

What follows is a lengthy recount of what Bob discussed. Lack of communication and access to information has been a big complaint of ANC pilots. Since most of us don’t have the option to attend Hub or Town Hall Meetings, what follows are the notes that I took at the LEC 79 meeting on July 19th. Please feel free to call or e-mail Guy, Ron, or myself if you have any questions.

In Unity –

Captain Susie Latvala

** Message from ALPA Communications: While well-intended, Captain Latvala’s notes may not be an accurate representation of the comments offered by Captain Chimenti. Please read this recount with caution and in the context of other MEC publications regarding the LOA.

July 19, 2007 – Snow Goose Restaurant, Anchorage

Special Guest Captain Bob Chimenti

Bob recognizes that some people think the LOA is inadequate in certain areas. Bob wouldn’t have brought the LOA back to the MEC if he didn’t think it was fair. He’s never brought anything to the MEC that he didn’t consider fair and gave the example of the proposed cash balance plan for new hires a few years ago which was turned down at the table. He didn’t think it was fair for everybody.

Bob said it’s not true that ALPA is accused for negotiating this LOA to benefit only a certain group of pilots (i.e. empty nesters). Certain domiciles have always been more attractive to certain groups (i.e. LAX favored Tigers and Navy pilots from SAN, or if MEM was attractive for everybody to live there, 70% of MEM based pilots would not be commuters). Obviously, only particular pilots will want to bid CDG or HKG, but the LOA is fair for everybody.

ALPA negotiated HKG in lieu of CAN (Guangzhou) - that city was so bleak and dirty that they told the company FDX pilots couldn’t be forced to live in CAN. The company agreed to make the base HKG (it’s within 100nm). HKG base requires GT and this will cost the company 15% productivity from the crew due to 3 hours commute each way.

Are there $9k apartments in MEM or LAX? Yes…just as expensive apartments exist in HKG. However, there are lots of apartments ranging from $2500-$4000 in great areas with expats and they are clean. The Negotiating Committee did not think a pilot going to HKG should have all their housing expenses paid. Just like the company doesn’t pay housing in MEM, ANC or LAX. The company figured the average mortgage+utilities for a pilot is around $3000. ALPA used $2000 a pilot for an estimate of out of pocket, so housing allowance (FDX) $2700 + (pilot) $2000 = $4700 month (apartment in HKG or CDG). If you don’t want to pay some out of pocket, don’t consider the base.

One of the biggest aspects of this LOA is enhanced Scope protection. This is a huge benefit for FedEx pilots because over the years we are getting lots of growth and most of it is international. Having ALPA and FedEx agreeing to extend the RLA to HKG and CDG benefits both groups in the long run.

During LOA negotiations, ALPA didn’t talk much about CDG – many very senior people are going to bid it. Many senior pilots will bid HKG too. 65% of pilots on our seniority list have been hired since 1995. Lots of new guys who don’t know some of the ‘inglorious’ history here. When SFS was opened, FDX said not to be covered by RLA. ALPA put out a notice not to bid SFS. That bid filled up in days - plenty of folks bid it anyway. And there were no financial incentives to bid the base. HKG will be bid whether the LOA passes or not – they only need 75-80 pilots. Bob’s not going to preach doom and gloom, but he doubts that FDX will go back to renegotiate LOA if it’s voted down.

Pilots had the same attitude in 1995 when that TA was voted down - lots of anger. In 1998 when we finally got a contract - it was no better than the TA voted down in 1995. In two areas it was much worse – Scope and trip rig. SCOPE clause in the TA voted down was with the holding company, not just Express. TRIP rig was 3.43:1, but became 4:1 in 1998, with not a significant pay increase. That may not happen here, but pilots should vote for this LOA because it’s fair.

When we open the bases in 2008, less than 2 years from Section 6 openers, that’s the time to improve the LOA because self help is available. If LOA is in place, we’ll only be arguing about the numbers, not trying to structure a deal from scratch. Any problems with the $2700 or tax-equalization may be addressed in Section 6.

STVs. All the talk about STVs pertained to opening Paris (not HKG) because CDG is being opened up with new airplanes. 757s delivered at the same time pilots are going thru training. In the event of bust, etc, then FDX could STV. Bob came up with the idea – hotel, per diem, families, thinks it’s a great idea. As far as inverse seniority, Bob doesn’t think it’s going to happen. Bob feels FDX is not going to take a new hire and send them over; the likelihood of an STV for HKG or CDG is not going to happen. If it does it will go senior (editor’s note: a side letter was approved 25jul07 limiting STVs to 1 bid period).

During negotiations for Contract 2006, ALPA sat down every day, every week no matter what the section was and started with section 1. Bob figured there was no sense in having an agenda if scope wasn’t worked out. Nothing else really mattered until scope was complete. Look at NWA – 4 operating certificates…Plus code shares with KLM and CAL. We don’t do that. We get all the flying. We want all the flying. The problem is because we want it all and FDX gave it to us, we have to do it. If we want it and we don’t do it, we greatly weaken our position in the future. The LOA is for 2 years before we can amend it (Section 6). We need to open the bases under this LOA and do all the flying! HKG is not going to be an Airbus base for long. It will turn into an MD base (MD10-30?). CDG will eventually be a widebody base too (not sure if A300 or MD). The new Paris flying is not replacing what we’re currently doing, they are all new cities. We’ll be serving 56 new cities in Europe. All new flying. Bob wasn’t going to stand there and tell us if we turn it down that we won’t get the flying, we probably will anyway. But it’s important for us (ALPA) to make deals and keep deals. ALPA knew that we’d have a contract last 7/20/06 – that was the first time the company came in and made a deal on scope. The fact they agreed there would be only one operating certificate is huge.

MaxKts 07-31-2007 02:06 PM

The 79 Snippet Part 2

---Are the allowances taxed?

Housing allowance is a taxable allowance in the US, but the company pays that. Not sure if storage allowance is taxed, but if it is, the company pays that, too.

---What about schooling?

FDX was never going to pay schooling. We’re pilots, not executives, we’re also not E1. When they send an executive over, they get to pick who they send. They can look and choose a person without kids and for pilots anybody can bid it – the company doesn’t get to make a choice on that, so doesn’t have a way to control costs like when sending an executive over.

There are options for enrolling your kids into American or British school in HKG…There’s also Xuhai, Shenzhen, and Macau, and you can get your kids into school there.

Bob told a story about kids being signed up for good private schools when born, so still hard to get into the best private schools in the US. Some people had to move from NY to CT because they couldn’t get their kids into school in NY. This is a problem happening everywhere, not just HKG. If schooling is your problem, then maybe shouldn’t bid it right now.

For some reason everybody thinks these bases (CDG and HKG) have to work for everybody, but have never thought that for other bases when they’ve been opened.

---The way the LOA is written seems to be very loose – there seems to be a lot of vagueness in the way the LOA is written (like the GT). How are the details going to be worked out?

Lots of issues are covered under CBA, but a few specifics for LOA have yet to be implemented. Everything in the contract applies to the LOA, plus the LOA. There is still a little sense of adventure built into this. GT will be on the clock at the present rate of pay for GT. The SIG GT waiver only applies to HKG and CDG.

---How did this LOA come about?

The average cost for the company to move a pilot is $50,000 (there and back) under CBA. The LOA is worth over $100,000 over 2 years, verses the CBA move package over 3 years (50k). The ability to bid under CBA Section 6 is still available. All these questions pilots are asking would still be in existence if the domicile was being opened under section 6 now, without the LOA. 2000 pilots had LAX on their standing bid before the details were figured out. The same thing will happen for HKG. People will bid it whether the enhanced package is there or not. It’s a moot point about getting answers to all the details. The base will be opened whether we want it or not. The only thing voting the LOA down will do is eliminate an enhanced financial package.

---Does Jack Lewis’ email have the effect of modifying the LOA?

ALPA didn’t think STVs were going to be an issue that’s why they didn’t tackle them in the LOA. Both sides knew that for inverses, one bid period would be the limit if they ever occurred. Everybody has always worried about inverse conversions. For the Airbus, they inversed SIBA only the first time. Every SIBA after that has gone senior. Even if the STV is implemented it is not going to go junior. We have 60 pilots living in Europe – 30 currently in Paris. Paris is a non-event. The big issue in Paris is whether a pilot living in Italy can qualify for the $2700/mo. Just as many FOs as CAPs living in Europe, so narrowbody pay is not a big deal. If you live 10 min outside of Paris, the cost of living is considerably less. One FedEx pilot has an apartment overlooking at the Louvre for 3200/mo (or was it $3700?) The standard of living in these bases is much smaller than the US. Usually less than 1500 square feet. ALPA was trying to get package for a shorter period of time than the CBA for people to be flexible and have an adventure. It gives lots of pilots an opportunity they wouldn’t have under the CBA. (editor’s note: side letter LOA 25jul07 limits STVs for 1 bid period.)

---Does the LOA and signing the letters tied to it restrict your ability to commute to any of those domiciles in anyway?

No. This is a supplement to the contract not replacing the contract. FDX tried to make it mandatory that you have to live there. They don’t want a Mailboxes Etc mailbox address. Are they going to tell you that you can’t have a roommate? No. Can you have a house somewhere else? Yes. Can you visit that house any time you want? Yes. Do you have to see your wife all the time? No. This issue will never come up unless somebody makes it come up by flaunting. Steve Hanks (FDX relocation) is removed from the factor of making the decision whether or not you live there. The Chief Pilot makes the decision whether you live there. If you have a receipt for a place you live, then that’s good enough. CDG has a larger area of approval due to the TGVs and straight to the airport. Possible for more options for commuting from way out in the countryside.

---CDG – if we have kids of any age, is it possible to get our kids into school in Paris?

Yes, the company should help you out. Several of our pilots have lived over there for a couple years and had no problem getting kids in school.

---Did the subject of valuing the compensation to the valuation of the dollar to the Euro or HKD.

It was discussed, but obviously not agreed upon. The Dollar vs. Euro is at a bottom now, so if it goes down any further, we’ll have much larger problems. In the past, there have been adjustments to offset yen, etc in extreme cases, so it can be addressed if it becomes an issue.

---Could you comment on the specter of if we decide not to pass the LOA if we might have FDX CAN and FDX CDG?

If we don’t approve the LOA, FDX could make CAN (Guangzhou) the base instead of HKG. They probably won’t, but they can. We should be worried about the effects of the optimizer – instead we’re fighting amongst ourselves regarding this LOA.

If we vote down the LOA, we open the possibility of the company creating another certificate to do the flying. There are folks in the company that hate the union and will say I told you so. If the LOA is voted down, they’ll say I told you so and press to have a subsidiary do the flying overseas. These same people thought we’d never get our act together to make a deal (contract 2006).

---What about 777 pay?

As to 777 pay, we don’t have to negotiate – that’s in the contract. When they bought the 777, FDX said it was a replacement for the A380 - it does the same thing the A380 does, so A380 pay rates should be applied to the 777.

---How long can you live in Paris? Can I stay 10 years in Europe?

We’ve been told you can stay there as long as you’d like. There is a 5 year visa limit, but that has been waived for France. China has a 5 year limit which should not be enforced. The expensive part of staying more than 5 years is paying into their social security system. The French have waived that, but they may change their mind. The Chinese are supposed to waive it.

---If you move lock stock and barrel to CDG do you have a choice between the LOA and Section 6?

Yes, but ANC has the LOA enhanced option plus the section 6 move (if you qualified for a move package to ANC). ANC folks have the regular move – you can take the value of the move to the lower 48 and move to Paris. If you have the enhanced option, you can still have your house here. When you move back, the company still owes you the move from ANC to lower 48.

---With FDX paying the tax equalization, what about confidence that FDX doesn’t know anything?

All Price Waterhouse is going to tell FDX is how much money they owe the government based on your taxes. You don’t have to have PW do your taxes, but PW is the only one FDX will pay for. If you use a third party, PW has to approve your tax return and tell FDX how much you owe.

fedupbusdriver 07-31-2007 03:31 PM

Thanks Max.

Albief15 07-31-2007 03:35 PM

"We should worry about the optimizer, not this LOA...

WTF is that?

What can we do about optimization except A) worry? B) call in sick/fatigued or C) b1tch? Are our NC imply that if we roll over and give milk on this the company will magically reducing the optimizer? Sorry--I don't buy it.

How about this? Why don't we worry about WHAT WE CAN CONTROL. Voting in a substandard LOA that WILL have our junior guys inversed for 30 days (+/- transit time...TBD)--and that is something we can prevent. If they make CAN the hub, then folks can bid it, or not bid it. If folks will eat $2000 out of pocket to live in CDG, then they can grab a couple trips and make another 2k or so the union seems to think is acceptable.

If we roll on STVs and this thing, then we'll be just as powerless against being inversed overseas as we are against the optimizer. Then our next NC chairman (who won't be Bob) can say "gee...why are complaining about wages--you ought to be worried about getting STV'd!"

DLax85 07-31-2007 06:52 PM

Sad, the whole thing is really sad.

Is there really not one dissenting opinion on the MEC outside of Subic?

Are there no independent thinkers?

...someone who isn't drinking the Kool-aide?

..someone without blinders on?

...someone that isn't using divide & conquer, doom & gloom or brinksmanship tactics to scare up the "Yes" vote?

...someone that can approach the company and say "Sorry, we've took a second look, a hard look, rethought this whole thing and it's inadequate---but hey, we can sit down and work something out that works for the Union and the company. We need to tighten up the language in a few places, and there are areas where we'll need some improved QOL compensation, but we all know the kind of profits the company is currently making and will make when these FDAs open. We're really not going to accept this as our "base std" and negogiate this up in 2 yrs. Let's sit down calmly and work this out now."

I really wonder what we could do together, united, if we were led by an MEC that wasn't so defensive, but rather stopped for a momemt and listened, truly listened, and then realized they can stand up to mgt and get a better LOA now.

The complicity they seem to have with management is truly amazing.

DiamondZ 07-31-2007 07:11 PM


Originally Posted by MaxKts (Post 206108)
STVs. All the talk about STVs pertained to opening Paris (not HKG) because CDG is being opened up with new airplanes. 757s delivered at the same time pilots are going thru training. In the event of bust, etc, then FDX could STV. Bob came up with the idea – hotel, per diem, families, thinks it’s a great idea. As far as inverse seniority, Bob doesn’t think it’s going to happen. Bob feels FDX is not going to take a new hire and send them over; the likelihood of an STV for HKG or CDG is not going to happen. If it does it will go senior (editor’s note: a side letter was approved 25jul07 limiting STVs to 1 bid period).

Let me get this straight...

BC assumed this would be a great idea and go senior?

Therefore, possible thought process of 'let's hook up the senior guys who want/can afford a one month trip in Paris. Give them a hotel, per diem, and fly that special someone over on the company's dime'.

If it turns out to actually be a horrible deal then the senior guys would be protected by invol junior manning.

Got it. Thanks. :rolleyes:

And no, there are no black helos over the house...just questioning motivation.

fdxflyer 07-31-2007 07:16 PM

Hard to believe that the NC came up w/ STV. I imagine that if the LOA fails, that will have him shown the door.........

Can you imagine if he stays? Every time he brings something up in a negotiation ----"Is that your idea Bob, or does that have the backing of the membership?"

And what was all the crap about the line-item veto? I don't want to line item - I want to help tube the whole deal!

Jaxman187 07-31-2007 07:25 PM

Do you think the company's negotiators were salivating when they costed out the potential savings STV could represent? Good luck getting them to let go of it if this LOA passes. I still have not heard whether travel to and from the STV will be handled as a deadhead or just a free ticket.

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