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Old 07-18-2006, 08:19 PM   #1  
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Default UPS TA, the other side of the story Part 1

TA Overview

Let’s take a look at this from a couple levels: “The big picture” and then in some detail.


The Big Picture:
Scope – The majority of the future growth at UPS is intra Asia and this TA allows UPS to outsource almost all of that growth. Flights that should or could be flown by a 727, 737 or partially full 757 AC can still be flown by the Chinese. This can also occur in other non-US theaters. The growth we expect & which was advertised has not been secured. Furthermore with the number of retirements scheduled, hiring is predominantly done to cover attrition. Even with UPS’ expected growth of 10% to 15% per year (compounding), we will be lucky to see over 3,200 pilots by 2013. That’s when the number of retirements is scheduled to swell to around 650 from today’s tally (that’s if the age 65 rule doesn’t pass). With only a conservative 10% growth factor, the pilot group should have grown to over 4,500 pilots (approximately) with the correct language (retirements accounted for). That difference is a huge savings to UPS. Did we gain enough in scheduling, pay and other areas to offset the lack of true growth? UPS gained a lot by not having to hire. What did we gain for the trade? Is the return on investment appropriate?

Scheduling – UPS’ network is changing & we are not privy to the details…yet. The number of gains in this TA is mitigated by the new and continued flexibilities won by UPS. Specifically, the increase in lines created by the new language is offset by the reduction of reserves needed and other language that chipped off a little here or there (Vacation relief given to UPS, ‘Conflict’ relief given to UPS, etc.). We won some nice gains on paper, but they are usually just that –gains on paper and not in the real world. The real gains are predominantly in line construction, but the core of the trip (where you are regularly exposed) has not really been protected. Most of the rules and philosophies behind the rules are good, but the limits themselves & what trigger the rules are not correct –too watered down to be truly beneficial. We should see a benefit initially, but after about two years, the majority of those benefits will disappear with network changes, the delivery of other aircraft & the reduction of reserve percentage as UPS becomes comfortable with their new reserve productivity. These rules will stay in affect until Dec 31 of 2013. Basically, UPS gets 10-yrs of stability. Does our return on this 10-yr investment sound good to you?

Pay – Initial captain salaries in this TA get us back to only a little more than what the dollar bought in 1998. We have roughly returned to 1998 buying power while giving more flexibility to UPS in addition to maintaining many of the flexibilities UPS enjoys today & will until 2013. Those flexibilities manifest themselves in increased productivity & slow or reduced upgrades. The annual raises merely keep wages in line with inflation. Moreover, they are less than those at FDX. What is also interesting is that CPT Miller on September 14, 2000 had a 17% raise & other issues targeted as the midterm correction for just correcting the MD11 situation (The McCabe letter sent to everyone). He was accused of having low expectations; yet six years later, this TA only increases pay 17.7%. Furthermore, the pseudo B-Scale that is hidden in the non-standard 767 captain’s pay slope is not corrected for immediately and is traded for a new pseudo B-scale called a 15-yr pay model. Last but no least, the missing part of a CPT’s 12th year Retro/Bonus is being used to pay for his raises during the life of the contract. Specifically, the raises from the date of signing (DOS) until the end of the contract equates roughly to $37,000, the missing retro is around $30,000. You are paying for your own raises with that $30,000. Is the return on investment appropriate?

Detail – Just a little more detail.



SCOPE

A quick overview connecting Scope and scheduling; we’ve been told that just about everything that the EB and NC gave away or didn’t attain has been advertised & rationalized as something they’ve given away to protect jobs. From the lack of serious hiring figures and the knowledge of a high number of retirements, much of the claimed IPA growth will really be due to attrition. What that means to those hired in 1994 and later is that upgrades and progression up the seniority list will be much slower than advertised. Those lucky enough to upgrade will be stuck in the lower 20% of seniority. The lower 20% to 40% of each seat will be the victims of flexibility gains the Company has secured. This group will get the worst schedules combined with stagnating advancement. Need proof? UPS isn’t hiring much more than what it needs to offset retirements. All the growth UPS has enjoyed over the last 5-years, including MENLO, has not done much for your seniority number; even more highlighted if comparing to FDX (UPS’ selling point to the IPA for a one-rate pay model was quick upgrades which is Scope related). As of the 2-1-06 seniority list, UPS only hired 276 pilots since 9/11 while having 248 scheduled to retire (are 59yrs old today). That’s only a net gain of 28-pilots before you count those on leave for medical & other reasons. FDX hired more than 1,200 pilots over the same time span. This appears to be what will occur in the future too; thus, the gains “advertised” by UPS really aren’t as significant as they would like them to appear. UPS has taken into account the NEW flexibility and productivity that the IPA has admitted to giving away and has adjusted their hiring and upgrades for it. In other words, expect no major growth at the IPA with the major expansion and increasing NET profit margins of UPS; a 4-billion dollars –and growing giant. The hiring will predominantly be for lack of hiring these last several years. To quote the IPA Highlight’s document (page 12):
“…[the scheduling article] still grants the Company enormous efficiencies and productivity…” (Similar statement in the 7-3-06 Flight Times.)


Let’s look at Scope (Article 1) to see if we got a good deal.
Art 1, page 9 (PDF p.9), 1-D.5(3) –and Art 2, page 2 (PDF p.16)
This is International flying. This could eliminate all 727 flying and future replacement airframes (i.e 737). The 757 carries 15-cans; do you think UPS would fly non-IPA 757s with roughly a 67% payload? Maybe even cheat a little when no one is looking deep in communist territories dead at night. Has UPS ever hid anything from us (MENLO)? The majority of our growth is in Asia. It is what will drive staffing & upgrades system-wide. Will UPS twist the language, its respective definitions and then apply it to domestic flying? Specifically, why have they redefined certain terms in relation to what we carry in back?

Art 1, page 9 (PDF p.9), 1-D.5(1)
UPS has the contractual right to outsource Int’l flying that touches US soil all year long in addition to Peak: Seven wet leases (i.e. 747s, A380s, etc). This reflects roughly a couple hundred jobs per today’s staffing levels and that’s NOT counting for UPS’ expected 15% per year compounding growth. Interestingly enough, it closely mimics what UPS is planning to do via MENLO, etc.

What about management pilots? Do you think having 335% more management pilots to manage 50% fewer pilots is normal (FDX comparison)? Did you know that all unionized airlines use their line/union pilots to double as management; including FDX?

Before we even consider future growth, the jobs diverted (lost) because of these loopholes and concessionary language is roughly several hundred jobs. That number increases as UPS grows over the next decade as we will hire & upgrade mainly to cover attrition. Loopholes & soft language directly impact staffing and upgrades in a negative way. Basically, the “bucket” of no longer needed pilots compound like interest in a 401K plan: Over time it becomes more significant. It will be at least December of 2013 before we sign another contract based on historical negotiating lengths at UPS.

Is this worth the trades in scheduling, pay & other areas? Is this industry leading and balanced to you?
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Old 07-18-2006, 08:19 PM   #2  
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Part 2

SCHEDULING

Most philosophies behind the new work rules are sound, but the trigger points that activate a rule & their limitations are weak & ineffective. Furthermore, the array of loopholes given to UPS aggravates the situation even more as time goes on. All the changes are hard to follow in the new rules, but overall the benefits are lessened and even negated with the new productivity. Sunday commercials, flying out of your backyard (city purity) and other things we take for granted can change because of network changes (i.e. Postal contract, new domiciles, etc.) –and these new rules. The network will change.

Below is what 20% of the lines can legally look like in the domestic theater. They can also mix day with night, with turns, with 4-legs & can fly 4-weeks in a PPD –that’s up to 8-wks straight in a BP.

SDF980 - CA 1 FO 1 SO 0 RO 0 BASE TRIP LINE Short Block

| | | | | | | |
TC xxhxx | 206 207 | | 250 207 208 | | 250 250 | | 249 250 |
TB xxhxx * | * * * | * * | | * * | | * * | | *
DO 13 | SDF SDF | | SJC SDF SDF SDF | | SJC SDF SJC SDF | | RNO SDF SJC SDF |
DD 14 S17 |M18 T19 W20 T21 F22 |S23 S24 |M25 T26 W27 T28 F29 |S30 S31 |M01 T02 W03 T04 F05 |S06 S07 |M08 T09 W10 T11 F12 |S13
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx


| | | | | | | |
TC xxhxx | 250 250 | |258 206 | | 250 | | 206 9207 |
TB xhxx * | | * | | * * | * * | * * | * * * | *
DO 14 | SJC SDF SJC SDF | |LAN SAT ELP SDF SDF | | SJC SDF | | SDF SDF |
DD 13 S14 |M15 T16 W17 T18 F19 |S20 S21 |M22 T23 W24 T25 F26 |S27 S28 |M29 T30 W31 T01 F02 |S03 S04 |M05 T06 W07 T08 F09 |S10
xxxx xxxx xxxx xxxx xxxx xxxx XXXX
================================================== ================================================== ================================================== =========

SDF940 - CA 1 FO 1 SO 0 RO 0 BASE TRIP LINE Long Block **example #2**

TC xxhxx 923 | 945 | |978 | |901 935 | |947 958 979 |
TB XXhXX | * * | * * | * * * * | * | * * | * * | |
DO XX RPT |xyz SDF RPT SDF | |RPT | |RPT SDF RPT SDF | |RPT abc SDF RPT RPT |
DD XX S17 |M18 T19 W20 T21 F22 |S23 S24 |M25 T26 W27 T28 F29 |S30 S31 |M01 T02 W03 T04 F05 |S06 S07 |M08 T09 W10 T11 F12 |S13
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

| | | | | | | 969 |
TC xxhxx 923 | | | 909 901 | | 987 | | |
TB xxhxx | * * * * | * * | * | * * | * * * | * * | * abc xyz ghi qrs |SDF DO XX RPT |xyz | | qrs SDF tuv SDF | | SDF | |
DD XX S14 |M15 T16 W17 T18 F19 |S20 S21 |M22 T23 W24 T25 F26 |S27 S28 |M29 T30 W31 T01 F02 |S03 S04 |M05 T06 W07 T08 F09 |S10
xxxx xxxx xxxx xxxx xxxx
================================================== ================================================== ================================================== ========



Are the trades really worth it? It will be 2013 or even 2014 before we see our next contract?

To really get a better grip on scheduling & what’s depicted here, please visit: http://IPAonTop.org

PAY
The top hourly rate is not industry leading pre or post 9/11. In fact, per the IPA’s own admission if you take into account inflation it’s only a $8.85 raise in buying power compared to the last raise in 2002 (12th year CPT). The $8.85 raise equates to an increase of less than $8,700 in yearly buying power today as compared to 2002. If you consider the initial raise in 1998, the raise today is only $2.85 and creates a buying power raise of less than $2,800. New health care costs further reduce these ‘gains’.

The bonuses are also weak. A 12th year captain’s true retro check based on $223.55 per hour should have captured around $90,000 & upwards of $94,000 if we use UPS’ credit figures used during negotiations. Instead you will receive $60,000 –and that will be split into two years. Factor in taxes and you will see around $19K each year for two years. FOs & FEs fall under the same situation. Moreover, the current and previous contracts received 100% retro versus this TA’s partial bonus.

The 15-year pay scale is not the norm for “A-list” carriers. In fact, it is common only amongst bottom feeders or those who have only secured their first or second contract. This is a concessionary move and is another pseudo B-scale. Moreover, this affects first and second officers the most. It takes 15-years to reach your top hourly rate where it would only take 12 years to reach it under the normal model of the industry. It may gleam information about the future of hiring and upgrades: It may take more than 10-years to reach captain’s status and pay. Your earning potential & other quality of life issues are affected by this situation. FDX has pilots hired in 2001 CURRENTLY making $160/hr versus our same 5th year pilots making $97.08/hr; our TA bumps it up to $117.26/hr. With that said under current contract, that FDX pilot will make $250,000 more by the time both pilots reach their 10th yr of employment. Also FDX is or was also going after pay triggers that drive their hourly rate to upwards of 40%: This means that a $200 hourly rate may pay upwards of $280 in their paycheck.

PENSION
At 18-yrs of service at FDX, they will receive over $90,000 in their A-plan; we will receive around $54,000. The employees that retire after this TA may not be as lucky, although they do get a better B-plan. BUT if you look back to pre-9/11 nest eggs that relied on stock (B-plan) many were sharply reduced within months. In other words, those sticking around a while may want to secure a better balanced A-plan to offset a possible loss of your B-plan in the future with stock market turbulence.

HEALTH CARE
Health Care will cost more, which eats into your pay raise; thus, reducing the hourly rate gain. Health care after you retire is also available, but it will cost you about a $100 dollars more than your highest monthly rate before you retire. Medicare supplement is also available, but that cost is ambiguous and strongly driven by your situation. The over 65-yr young pilot I flew with said his cost would be at least $600 each month because of only two prescriptions. That may or may not sound like much, but as your yearly pension stays the same (i.e. $54,000) you know that health care costs will rise. Take into account inflation and in several years it will absorb a larger portion of the pension nest egg.

THOUGHTS TO LEAVE WITH:
 If the scope and scheduling articles are that great, then why hasn’t UPS hired more pilots?

 Why has FDX hired over 1,200 pilots since 9/11 and UPS roughly 300 pilots; or more pointedly, why have they hired more in 2-months than we have in roughly 1-yr?


 Did you know that UPS is estimated to make a net profit of around $7.5-billion dollars by the time the next contract is signed? SUPER! WE all work for the same Company.

 Did you know that equates to roughly $850,000 per hour… every hour –all year long?

 Do you know that a PEB is NOT a bad thing and that it/they cannot bind us to arbitration?

 Do you believe as I do that we can attain a better contract in a relatively short period of time?

Proud to be a team member of the UPS and IPA team….
Respectfully,
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Old 07-18-2006, 08:40 PM   #3  
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I am going to have my unused YES ballot laminated so I can beat people about the head with it for the next nine years if this POS passes.

Those of you who worry about Brown not doing well in the future, rest assured they will get the contract renegotiated to the down side pronto, however there will be no renegotiation for an upside move in profits. Get it done now or suffer the hit for the next decade just as you have lagged this decade.
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Old 07-19-2006, 03:19 AM   #4  
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Quote:
Originally Posted by Zoro

Why has FDX hired over 1,200 pilots since 9/11 and UPS roughly 300 pilots; or more pointedly, why have they hired more in 2-months than we have in roughly 1-yr?
Zoro....all great points. I really could care less how much FedEx has hired. United, American, etc. hired a lot before 9/11 too. Just because a company hires like mad doesn't mean things are going to work out wonderfully there. Fast growth and mad expansion is not always the best thing IMHO.

Also, where are you getting that they could mix nights with days, etc? When I read the scheduling section, I understood it to read that they couldn't do that.
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Old 07-19-2006, 07:11 AM   #5  
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Toro...

First of all...a very appropriate name <BG>. A lot of what you are spouting is bull. Fedex hired 800 pilots for the postal contract which they were awarded in 2001. The retirements at federal are much greater than at ups. So they hire more pilots to replace those who have retired.

If you compare the slave ship capts at 5 yrs with 5 yr fo pay here, yes you will see a big disparity. DUH!!!!! There are many at federal who choose not to fly the galley for many reasons. Pay is just one of them.

The website you refer us to, FF's site, is not yet up and running. He has already distinguished himself (in a bad way) by penning obscenities on a federal labor document. He can cherry pick with the best of them and it's very easy to sit on the sidelines and bitc* about the ta; coming up with a way to get the increased pay and ironclad scheduling is beyond his ability. I don't trust a lot of people on the nc but those I do (GK and GL) say they have fought tooth and nail for the improvements here. You're option (I want it all and I want it now) reminds me of spoiled kids who think they are entitled to the world. You don't get what you want, you get what you negotiate.

JMO

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Old 07-19-2006, 09:05 AM   #6  
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Quote:
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You don't get what you want, you get what you negotiate.
Pilot7576
And that's why we have to send them back in. This TA is only half baked (at best). It'll probably take new leadership and, most assuredly, a new NC. I'm not going to settle for this POS TA and I encourage my fellow IPA bretheren to send this thing back. We will get what we negotiate and it will be what we want...if we stick together.

100% NO

100% IPA
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Old 07-19-2006, 03:15 PM   #7  
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Quote:
Originally Posted by Freightpuppy
Zoro....all great points. I really could care less how much FedEx has hired. United, American, etc. hired a lot before 9/11 too. Just because a company hires like mad doesn't mean things are going to work out wonderfully there. Fast growth and mad expansion is not always the best thing IMHO.

Also, where are you getting that they could mix nights with days, etc? When I read the scheduling section, I understood it to read that they couldn't do that.

Comparing Fed Ex to UPS is like comparing apples to oranges. Nobody mentions the amount of air that UPS trucks compared to Fed Ex. Hence the reason why the need for less pilots and less aircraft. That is how the profit margins work out better. Ship a Next Day Air (non saturday delivery) on a Friday from Boston to Atlanta and the thing will never touch an airplane.
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Old 07-19-2006, 04:43 PM   #8  
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Quote:
Originally Posted by Freightpuppy
Zoro....all great points. I really could care less how much FedEx has hired. United, American, etc. hired a lot before 9/11 too. Just because a company hires like mad doesn't mean things are going to work out wonderfully there. Fast growth and mad expansion is not always the best thing IMHO.

Also, where are you getting that they could mix nights with days, etc? When I read the scheduling section, I understood it to read that they couldn't do that.
One of the biggest reasons we are hiring so many is to keep pace with our guys retiring. We did not hire for years and now are playing catch up. We have guys retiring like crazy and we are way behind the eight ball. Thus, the huge capt. bids...We are growing but a good portion of it is just to maintain.
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Old 07-19-2006, 05:32 PM   #9  
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heres a simple solution
change you contracts to a shorter amount of time, that way it can be reevaluated
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Old 07-19-2006, 11:29 PM   #10  
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Pilot7576:

You must be one of those cheap UPS pilots that instead of getting real prescription glasses, you went to Walmart and bought some cheaters. Please have your vision checked, it’s not Toro, not even Zorro, it's just Zoro....

For those FedEx guys that think that UPS pilots got a great deal, please don't forget the devil is on the details. Please go to www.ipaontop.org and check the website, its fully operational. You can also go to the URL below to see a power point presentation just skimming the top of what is to come for UPS pilots if they agree to this TA.


http://ipaontop.org/media/pp.ppt#475,1,
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