The comments on Profit Sharing are helpful. It's good to see the different perspectives on what it represents.

It's fun to read Carl claim we don't lead the industry in any areas in the same thread he comments on Profit Sharing. Name a pilot group that gets more.

Or a pilot group with a better ADG, or better augmentation limits (8 & 12). The augmentation rules should be obvious and important to those who fly international.

My source is the DALPA produced contract comparison Karnak. According to that document, we don't lead the industry in one single section.

Carl

According to Carl, it's impossible to cost out profit sharing. This only illustrates that Carl hasn't the faintest idea of how to manage a business. Which is fine, he's an airline pilot and doesn't need to know in order to do his job. But, when dispensing wisdom on the topic, his rhetoric should be severely discounted.

Management is very comfortable and equipped to cost profit sharing. Our professional negotiating team is equally comfortable and equipped to cost as well. The idea that PS is a freebie is pure fantasy. That notion is best illustrated in the famous and popular "why should we fund our own pay raise by monetizing PS?"
This is an enduring misconception only slightly less popular than the "cash sitting on the sidelines" allusion in economics.

The heart of the misconception originates from removing risk from the value equation. When one does this, false premises are introduced. Such as profitability will always endure at current levels or higher. This of course leads to the belief that the business cycle has been vanquished. Millions have been slaughtered in an attempt to vanquish the business cycle, which is a central tennent of Marxism.

The fact is that when profitability accelerates higher following a monetization at par, a premium is paid by the holder of the monetized contract. In that sense, one pays for his raise in fixed pay rate. If profitability wanes, your monetization contract generates a windfall. So instead of paying for your raise, your contract itself generates the additional income.

No perpetual motion.

Yikes!

Carl

ST,

Are you good with a 4-8-3-3 raise that includes our PS
or
a 20-8-3-3 (add your 16%) raise that gets rid of PS?

Personally, IMHO, PS is a bonus to allow me to be a motivated and a happy team-member. I do not consider it as part of my pay or as a budgeting tool for my finances. I like the SHARE the WEALTH mentality and if the company is doing well, then we should get PS. God knows, when the company does bad, not only do we not get PS; they come after our contract and take away.

PS should not be used as leverage, or be spun to make it seem like we get paid more than others. Our contract needs to be improved by many metrics, not only pay but work-rules. 4-8-3-3, once again will not suffice.

I have talked to a few team members and I am actually surprised at their desires for C2015. Most people want better pay, PS and enhanced work rules. But there are still some pilots that are timid and dont believe in themselves or dont want to rock the boat :confused: They would settle for a marginal agreement as long as they get money in their pockets now.

If we truly wanted restoration plus inflation, we could achieve our goal. But some are not interested.

TEN

Management's team will come up with an estimate for what our current PS is going to cost them down the road. That cost will go into the overall pie. All things equal and comparing only pay rates and PS, fixed pay rate increases will vary inversely with the degree management is exposed to PS commitments. The higher the cost of PS, the lower our fixed pay rate increase potential.

Again, no free lunch or perpetual motion. Just a choice on how much risk exposure we want to have.

They can make all the estimates they wish, but it won't be counted by the NMB in this Section 6 process. It can't be counted because the foundation of profit sharing is future profits...which are unknowable.

Not with the NMB they won't. If it gets rolled into the overall pie, it will be because our union agrees to this concession that would never be tolerated by the NMB's costing analysis.

Completely incorrect. Pay rates and profit sharing are only connected historically. They cannot be proportional in any way when negotiating a Section 6 contract because Section 6 deals with negotiating future items.

Nobody is calling profit sharing a free lunch. Profit sharing simply has no quantifying capability in Section 6.

Carl

Well. You are completely wrong, again.

Actually, glaringly so and it highlights your lack of knowledge on the subject.

First , let's look at the definition of profit sharing

Profit-Sharing Plan
DEFINITION OF 'PROFIT-SHARING PLAN'
A plan that gives employees a share in the profits of the company. Each employee receives a percentage of those profits based on the company's earnings.

Also known as "deferred profit-sharing plan" or "DPSP."




Our pay rates and benefits are fixed costs to the company and of course are budgeted per fiscal year.

Obviously, profits can be estimated, but are subjected to market forces, and are never budgeted in accounting.

Profit sharing, in Delta Air Lines case, refers to our incentive plan introduced after bankruptcy that was meant to make up for the pay and benefit cuts as we emerged from bankruptcy and realized the better performance supplied by reducing the debt drag.

A big part of the reduction in debt was the elimination of our pension, a 51% slash in pay rates, and significant work rule and benefit cuts.

This incentive plan provides a direct payment to employees that depend on company's profitability in addition to employees' regular salary and bonuses.

It is reasonable therefore to expect our association to treat PS and wages separately a during negotiations.

The scenario you describe in your post, Tool, is the narrative that is flawed and what the company would like to project. It's also highlight your basic lack of knowledge on why and how we even came to have profit sharing.

It's an easy "but for" logic string.


We wouldn't even have PS if it weren't for BK and concessions.

Try again Tool. Your message shaping skills need polishing.

I don't view any distinction between PS and other fixed rates of compensation, other than the risk element. Management has a total cost figure in mind that they will draw the line at when costing our contract. We intuitively understand that and I refer to it as the pie. How we allocate the slices is to be determined by the negotiating committee and the MEC. PS is merely a slice of the pie.

My view on pay rates is grounded by what is possible. What is possible is grounded in what is responsible. Specifically, what is responsible management from the board's and shareholders perspective. That ultimately will determine the size of the pie. So I like to start with what is rational, but likely pushing the envelope. That sets my upper bound. My lower bound will be established by industry standard plus a dollar, which is pushing the envelope in the other direction. I expect something in between those bounds.

Well. You are completely wrong, again.

Actually, glaringly so and it highlights your lack of knowledge on the subject.

First , let's look at the definition of profit sharing

Profit-Sharing Plan
DEFINITION OF 'PROFIT-SHARING PLAN'
A plan that gives employees a share in the profits of the company. Each employee receives a percentage of those profits based on the company's earnings.

Also known as "deferred profit-sharing plan" or "DPSP."




Our pay rates and benefits are fixed costs to the company and of course are budgeted per fiscal year.

Obviously, profits can be estimated, but are subjected to market forces.

Profit sharing, in Delta Air Lines case, refers to our incentive plan introduced after bankruptcy that was meant to make up for the pay and benefit cuts as we emerged from bankruptcy and realized the better performance supplied by reducing the debt drag.

A big part of the reduction in debt was the elimination of our pension, a 51% slash in pay rates, and significant work rule and benefit cuts.

This incentive plan provides a direct payment to employees that depend on company's profitability in addition to employees' regular salary and bonuses.

It is reasonable therefore to expect outer association to treat PS and wages separately a during negotiations.

The scenario you describe in your post Tool is the narrative that is flawed and what the company would like to project. It's also highlight your basic lack of knowledge on why and how we even came to have profit sharing.

It's an easy "but for" logic string.


We wouldn't even have PS if it weren't for BK and concessions.