I dont know if this was posted before.....

July 15, 2008

Dear fellow pilot,

Recently, this Corporation compared our current environment to the crisis of September 11 which led to the bankruptcy we entered nearly six years ago. My observation is that the bankruptcy storm was weathered on the backs of the pilots and other employees through our sacrifices. The company will not enjoy that same luxury to get through this latest crisis. The pilots and other employees simply have no more to give. We’re tapped out. It is my belief that if the company expects to weather this storm, it must find a way to appeal to the employees’goodwill, and it is my opinion that this employee group is not inclined to follow this management group anywhere.

No one disagrees that the environment today is different from that of last year, last month or even last week. The price of jet fuel sets record highs day after day. The price of an airline ticket is modestly increased, fuel surcharges are added, baggage fees are imposed and soda charges are collected. At home, the cost of gasoline to fuel the cars we drive to work moves upward; the loaf of bread, gallon of milk, and dozen eggs that we buy to feed our families cost more. In the workplace, our hours are longer and our pay remains stagnant while the cost of living skyrockets. We are confronted with maintenance challenges, we are confronted with scheduling challenges, and we are confronted with weather challenges. Yet, we continue to exhibit the highest degree of professionalism in providing our customers with safe, reliable transportation. For all our efforts, this company continues to display its total lack of respect of the front line employees who make this airline fly everyday.

For more than seven months your union has confronted this management with the undeniable fact that the contract you and I are currently burdened with is no longer acceptable, viable or sustainable. Despite being in the same environment, I don’t have an answer when you ask, Why do American’s pilots make more than I do and still have their pension? Why are Southwest’s pilots treated better by their management? What is it about Continental management that they announce layoffs and in the same breath said they would forgo their salaries for the remainder of the year? Why are we so different?

We face a focused, hostile and arrogant management group: a management group that gives not a damn about you, your well-being, or the well-being of your family. A management group that has rewarded everyone but the frontline employees who make this airline fly everyday. They have rewarded themselves with exorbitant bonuses, they have rewarded the shareholder’s with untimely dividends and they have rewarded the banks with premium fees for the pre-payment of debt and covenant relief.

Since my election last October, your MEC leadership and I have been busy with many moving targets. Immediately after our election we learned that United was in serious talks with other airlines about possible mergers. In the event of any such merger, we took every necessary step to ensure that the United pilots would be included at the table of any merger talks. Had a palatable merger gone forward, we would have been successful in our goals of collective gains for our pilots. Subsequently, US Airways was, for us, a “no deal” and we worked hard both in the public eye and behind the scenes to stop that merger. We no longer find ourselves in the merger arena.

Just more than seven months ago, in an effort to restore dignity, respect and financial sanity to our careers, your union took a new tack with this management team. We made it clear that there would be no more concessions from this pilot group, and we repeatedly pointed out to our executives that contented, motivated employees directly affect the bottom line. As recently as last week, I repeated once again that there would be no more concessions.

We have been asking the company to begin negotiations and open our contract earlier than traditionally required. The purpose for this repeated request should be obvious: we continue to live our lives and work our jobs under the onerous contract imposed upon us during bankruptcy. We did not willingly negotiate our present contract. We reluctantly agreed to it only under the duress of bankruptcy. This senior management group does not live under the same contract or even the same environment that we continue to live under. Management’s bankruptcy ended in February 2006. Ours goes on and on with no end in sight. They give not a damn.

We have been attempting to negotiate quality-of-life and fatigue mitigation improvements to our contract since January 1st. As recently as May 22nd we exchanged a proposal that would significantly improve your working life in hopes that the company would recognize the value of your goodwill. These negotiations have been slow and unproductive. Most of the focus over the past few weeks has been on the furlough mitigation agreement in which we reached closure on July 10th. While these negotiations led to the recently ratified agreement, what was contained in that agreement was meager at best. As I said in my recent video message of June 25th, many of the items contained are offered out of hand by most company’s that find themselves in a similar situation without any negotiation. This management feels, and continues to feel that any gain no matter how large or small, must be offset,management-speak for concession.

I hold out little hope for improvements on the remaining issues. On a pilot early retirement plan (PERP), the company is so far away from a realistic proposal I have instructed the Negotiating Committee to cease discussions on the subject. On the quality-of-life and fatigue mitigation items, items which are of no cost to the company, I have also instructed the Negotiating Committee to cease discussions as each and every counter proposal by the company has contained offsets There will be no offsets. When the company realizes that happy, motivated pilots offset the costs associated, if any, with quality-of-life improvements and fatigue mitigation, then and only then will you see improvements in your daily work lives.

We all have known that this management group is inept when it comes to the operational side of the airline. United’s environment is exasperated by this management’s failure to adequately plan and prepare for the future. While other airlines have hunkered down and saved cash to weather the economic storm, United’s senior managers squander money on themselves and unwarranted dividends. While other airline executives have foregone salaries during these times, United’s executives continue to reward their poor business decisions with millions of dollars. While other airlines are grounding fuel-inefficient airplanes and replacing them with newer more fuel efficient aircraft, United announces a plan to ground up to 100 aircraft, increase its express flying and lay off thousands of employees. While other airlines acknowledge the sacrifices its employees have made in the past, United dismisses the sacrifices of its employees and instead demands more. While other airlines concentrate on reducing costs in today’s price-sensitive environment, United continues year after year with the highest costs in the industry. While other airlines concentrate on customer satisfaction, United lags the industry in nearly all consumer ratings.

At the Merrill-Lynch Transportation Conference held June 18 in New York, United unveiled their latest plan. Entitled Back To Basics, here are the goals management sees to getting United back on track: ndustry-leading margin and cash flow, unrivaled customer satisfaction and experience, aligned employees, and world class safety performance. Take another look at those goals, and decide for yourself how pilots contribute to them. United’s pilots contribute significantly to the margin and cash flow, unrivaled customer satisfaction and experience and to the world class safety performance. But those contributions go unrecognized and disrespected, except for the occasional hotdog in the domicile. Glenn Tilton justifies his high salary because of all the hard work he claims to perform on behalf of this airline. His hard work has resulted in our stock price down 91%, customer and service ratings in the toilet, and icy employee climate survey results.

There are many low-cost and no-cost items that would go a long ways towards improving pilots’quality of life, creating goodwill and increasing the bottom line. Examples are opening the contract early to ensure its completion by the amendable date; an effective trip trading system with realistic flexibility; a realistic cap and minimum guarantee; downtown layovers that only cost just slightly more than 10% of management's recent stock take away; and offers to fly 90 seat United aircraft to offset the express RJ-50s that are financially draining - even more important now with the impending 737 groundings. But then this management gives not a damn.

United must learn that goodwill and respect for employees go a long way in a service industry. This company publicly desires the admiration equaling those of Fortune 500 companies but it is not willing to earn it. Respect cultivates respect; and contempt breeds contempt. Engaged employees make aligned employees. We are looking for a new beginning and believe this management group is missing a valuable opportunity by refusing to engage with its pilots and employees.

You will see renewed and focused efforts on the part of your union that will highlight the importance of United pilots’contributions to this airline. Do not discount the efforts all of us make each and every day that enable this company to operate. We cannot get out from under the present contract on time if we do not begin our work now. Stay connected, get on board and be unified.

Fraternally,






Captain Steve Wallach
Chairman, United MEC

 

Very well written letter!!!

Management types have only padded their pockets, true.

Pilots need to take some responsibility though. The 'number one contract/golden goose' thing wanting alot of money for the least amount of work surely contributed to the current state that U is in.

It is fair to point out what management is doing now is criminal but unfair to say that nothing the pilots have done in the past led to UALs financial situation.

My 3 cents:

1. Expect to get paid when you work, not when you don't.
2. Don't take your dissatisfaction out on the customer. They are paying you.
3. Don't treat fellow employees with distain. They are helping you.

I have 17 more cents but don't want to detract from the letter above.

Cpt Wallach's letter that basically says that a good management team starts from the top. Treat your employees well and they will take care of the customer who will come back.

 

One only needs to look at the success of Southwest to see how true that statement is.

 

UAL is not a rudderless ship. You just need a competent captain at the helm who knows how to steer the ship.

 

Spanky,

I can tell by your .03c that you don't work here. Your assessment of how we got to the current state of affairs at UAL is consistent with what our management, and by extension, the media wants you to think. There is a whole lot of reality missing.

 

Please don't blame the pilots for the current financial shape United is in. Delta pilots got United plus 1% right after our contract 2000 was settled, yet, today, Delta is doing quite well relative to United. The blame for the condition United is in rests solely with the United CEO who has focused on merging rather than properly running an airline.

 

Spanky,
your jealousy and total misunderstanding of what's going on at the majors
is amazing.
7576

 

Ok, I am going to call you out on this one.

Which two airlines have been focusing the most on a merger recently? Delta and Northwest. They have yet to merge and benefit from all the synergies a merger brings to the table. Yet which two passenger airlines made the most money last quarter? Delta and Northwest ($138 million and $170 million dollars, respectively). In fact, they were the only two legacy carriers to turn a profit. Is anyone getting on Anderson's and Steenland's case for focusing too much on merging? Of course not. So Delta and Northwest were the only two legacy carriers that were able to turn a profit with $140 a barrel oil. Wait until they actually merge and start benefiting from the synergies a merger brings to the table. I believe $2 Billion dollars a year is the amount in savings being thrown around right now. I think the name Super Delta will be fitting of their performance post merger.

So why are we on Tilton's case for focusing on a merger? If Tilton is able to successfully merge UAL, that is what he is going to be remembered for. It will be his greatest contribution to UAL and to the entire industry.

The airline industry is between a rock and a hard place. There is way too much cut throat competition. Fuel prices are out of control. And fares cannot be raised fast enough with the weak economy. One easy solution to eliminating competition without cutting too much capacity is to merge airlines. It also saves billions per year in overhead costs. Delta and Northwest figured it out. I am glad United is a big supporter of mergers. It will be great for this industry in the long run. And Tilton is the man to do it for UAL. Remember Tilton helped orchestrate the most successful merger ever in the oil industry between Chevron and Texaco.

UAL has been mismanaged. There is no disagreement there. But saying that Tilton focusing on a merger is a bad thing is completely wrong.

 

I don't think the point of the post you referenced was that trying to merge is necessarily a bad thing. What Tilton has done is stopped running the airline (assuming he was ever running it in the first place).

The difference between us an DAL is that DAL management has shown enough competence to run the airline AND go forth with a merger. Glenn and co. is not capable, or willing, to match that performance.

Anything that hurts Tilton warms my heart these days - and he has earned that sentiment. What made me smile is that his total incompetence is what kept the CAL merger from happening. The two reasons CAL management gave for not merging with UAL were 1) Dismal 1st Q losses. Those losses were DOUBLED by Glenn giving himself a million dollar breakfast and tossing $250 million out the window with some "special dividend". Without that $250 million hit, our 1st Q would have been in line with everyone elses. 2) The poisonous employee culture. Glenn is on record as saying "Employee moral is not my problem". Looks like its your problem now, Glenn!! He is the Bush of the airline industry.

 

Wasn't it Pat Patterson, UAL's CEO who stepped down in 1966, that coined the mantra - Take care of the employees, they will take care of the customers, the customers will take care of the shareholders.

Southwest does this well, although it's not rocket science. It makes one wonder why any management would treat employees as a liability rather than an asset.