MUST READ for Pinnacolaba Pilots:
12-21-2011, 11:00 PM
#1
Gets Weekends Off
Thread Starter
Joined APC: Dec 2010
Posts: 977
MUST READ for Pinnacolaba Pilots:
PINNACLE IS WORKING WITH A COMPANY THAT PROUDLY POSTS THIS ARTICLE ON IT'S NEWSFEED:
Wage Slasher
by Mark Tatge (Forbes.com)
http://seaburygroup.com/Web/Aerospac...icle_2003_0217
With help from a Chapter 11 filing, DAVE SIEGEL persuaded $336,000-a-year airline pilots to take huge pay cuts.
David N. Siegel, chief of US Airways Group, the nation's seventh-largest carrier, is leading a revolution that may change the airline industry forever--by challenging its most powerful union.
He'd be loath to say so. His main job, in the 11 months he has spent as chief executive, has been to turn around this seeming basket case, which suffered a 16% drop in business since Sept. 11, a Chapter 11 filing in August, delisting from the NYSE (shares trade over-the-counter for 22 cents), an estimated $1.2 billion loss last year on revenue of $6.6 billion and a fresh defeat in the Senate of a plan to extend payments to its pension fund by 23 years.
And yet the 41-year-old veteran of Continental Airlines, Avis Rent A Car and Northwest Airlines is upbeat. "I've never been more optimistic," he says. "It's a fresh start for the company."
Is it ever. Yes, Siegel has done the predictably correct things to right the carrier, due to emerge from bankruptcy in March. He has restructured $8 billion in on- and off-balance-sheet debt, handed pink slips to 3,700 workers, slashed the fleet from 417 to 279 large jets, increased the airline's load factor--the fraction of available seats paid for--2.1 percentage points to 71% and dropped the cost per available seat mile to 11 cents from 12.2 cents the year before. But he also succeeded where nearly everyone else--at US Airways (otc: UAWGQ - news - people ) or at any other carrier--has failed before: in persuading surviving employees to take $1 billion a year in wage and benefit cuts. (Siegel himself took a 20% pay cut and passed on a $750,000 bonus.) More specifically, he has cracked a vertebra in the strong back of the Air Line Pilots Association (ALPA), which represents 67,000 pilots nationwide. With huge reluctance Siegel's 4,059 pilots have accepted average wage cuts of 32% to 40%.
If it can happen at US Airways, can bankrupt UAL (nyse: UAL - news - people ) (United) and financially lame AMR (nyse: AMR - news - people ) (American) be far behind? Siegel is unapologetic. "We either have a cost structure where we make money or we go away," he says. As a result of those concessions and across-the-board cutbacks, this optimistic boss believes US Airways will book a profit in 2004.
Siegel seems to have won over his people through amiability, straight shooting and steeliness--a bit like his Hollywood hero, Arnold Schwarzenegger. He constantly talks to people. Not only across the negotiating table but at cookouts, in hallways and break rooms. He flies in the cockpit jump seat discussing work rules and pay issues with pilots. "Dave is not one of these CEOs who leaves by the side door to avoid employees," says David Bronner, chief executive of the Retirement Systems of Alabama, the pension fund providing $500 million in interim financing. Patricia Friend, international president of the Association of Flight Attendants, says Siegel is "doing the best he can with a bad situation."
Better than that, he has exploited the downturn to extract unprecedented concessions, especially from pilots. Within a month of taking over last March, Siegel was able to persuade union leaders that, on its then-current course, the airline would run through $1 billion in cash within 12 months and probably find no lender willing to provide more. "The unions were shocked," says John Luth, a financial adviser to the airline. "No one had put it in these terms before."
With candor came toughness. In June, Siegel and Senior Vice President Jerrold A. Glass negotiated a deal with the pilots dubbed "jets for jobs." Pilots laid off from mainline jets would be offered half the new openings for pilots on regional jets (50 seats), now flown by affiliates under US Airways' colors. They will be hired first for all new pilot jobs at US Airways' new regional affiliate. Made by Bombardier and Embraer, these little jets are quieter and more fuel-thrifty than US Airways' aging turboprops. They will make it economical for the airline to continue flying to places like Omaha, Madison, Wis. and Mobile, Ala.
Pilots are not thrilled: A first-year regional-jet captain gets $51,000 for a work schedule that has him in the cockpit for 1,020 hours a year. That compares with $193,000 for a 12-year captain flying an Airbus A330 (who was making up to $336,000 six months ago). A pilot who is laid off and rehired at a regional starts at the bottom.
The pay-cutting started in July when US Airways was awaiting word on its $1 billion federal loan guarantee application. First officers on A330 jets were cut from $229,000 to $143,000; on Boeing 737s, from $152,000 to $111,000. Three days before filing for Chapter 11 on Aug. 11, 2002, grumbling pilots agreed to a six-and-a-half-year virtual freeze on wages, save cost-of-living allowance. Two days after United filed for bankruptcy on Dec. 11, 2002, US Airways pilots okayed a second round of wage givebacks, averaging 8%. "These were done under threat of liquidation," says Roy Freundlich, spokesman for the US Airways unit of ALPA.
"Everyone has had to make sacrifices, and the pain has been enormous," says Siegel. More torment is to come. Yet to be resolved is $3.1 billion in pension liabilities affecting 7,000-plus employed, furloughed or retired pilots. Average retired pilots expect 50% of annual pay, or up to $70,000. But Siegel says unless he's permitted to pay those obligations over 30 years, he will foist a $500 million obligation on the Pension Benefit Guarantee Corp. Most US Airways pilots could get as little as $28,000 annually.
Workers at United, American and other lines are now competing against a trimmed-down US Airways. How long can they prop up the wage scale?
Wage Slasher
by Mark Tatge (Forbes.com)
http://seaburygroup.com/Web/Aerospac...icle_2003_0217
With help from a Chapter 11 filing, DAVE SIEGEL persuaded $336,000-a-year airline pilots to take huge pay cuts.
David N. Siegel, chief of US Airways Group, the nation's seventh-largest carrier, is leading a revolution that may change the airline industry forever--by challenging its most powerful union.
He'd be loath to say so. His main job, in the 11 months he has spent as chief executive, has been to turn around this seeming basket case, which suffered a 16% drop in business since Sept. 11, a Chapter 11 filing in August, delisting from the NYSE (shares trade over-the-counter for 22 cents), an estimated $1.2 billion loss last year on revenue of $6.6 billion and a fresh defeat in the Senate of a plan to extend payments to its pension fund by 23 years.
And yet the 41-year-old veteran of Continental Airlines, Avis Rent A Car and Northwest Airlines is upbeat. "I've never been more optimistic," he says. "It's a fresh start for the company."
Is it ever. Yes, Siegel has done the predictably correct things to right the carrier, due to emerge from bankruptcy in March. He has restructured $8 billion in on- and off-balance-sheet debt, handed pink slips to 3,700 workers, slashed the fleet from 417 to 279 large jets, increased the airline's load factor--the fraction of available seats paid for--2.1 percentage points to 71% and dropped the cost per available seat mile to 11 cents from 12.2 cents the year before. But he also succeeded where nearly everyone else--at US Airways (otc: UAWGQ - news - people ) or at any other carrier--has failed before: in persuading surviving employees to take $1 billion a year in wage and benefit cuts. (Siegel himself took a 20% pay cut and passed on a $750,000 bonus.) More specifically, he has cracked a vertebra in the strong back of the Air Line Pilots Association (ALPA), which represents 67,000 pilots nationwide. With huge reluctance Siegel's 4,059 pilots have accepted average wage cuts of 32% to 40%.
If it can happen at US Airways, can bankrupt UAL (nyse: UAL - news - people ) (United) and financially lame AMR (nyse: AMR - news - people ) (American) be far behind? Siegel is unapologetic. "We either have a cost structure where we make money or we go away," he says. As a result of those concessions and across-the-board cutbacks, this optimistic boss believes US Airways will book a profit in 2004.
Siegel seems to have won over his people through amiability, straight shooting and steeliness--a bit like his Hollywood hero, Arnold Schwarzenegger. He constantly talks to people. Not only across the negotiating table but at cookouts, in hallways and break rooms. He flies in the cockpit jump seat discussing work rules and pay issues with pilots. "Dave is not one of these CEOs who leaves by the side door to avoid employees," says David Bronner, chief executive of the Retirement Systems of Alabama, the pension fund providing $500 million in interim financing. Patricia Friend, international president of the Association of Flight Attendants, says Siegel is "doing the best he can with a bad situation."
Better than that, he has exploited the downturn to extract unprecedented concessions, especially from pilots. Within a month of taking over last March, Siegel was able to persuade union leaders that, on its then-current course, the airline would run through $1 billion in cash within 12 months and probably find no lender willing to provide more. "The unions were shocked," says John Luth, a financial adviser to the airline. "No one had put it in these terms before."
With candor came toughness. In June, Siegel and Senior Vice President Jerrold A. Glass negotiated a deal with the pilots dubbed "jets for jobs." Pilots laid off from mainline jets would be offered half the new openings for pilots on regional jets (50 seats), now flown by affiliates under US Airways' colors. They will be hired first for all new pilot jobs at US Airways' new regional affiliate. Made by Bombardier and Embraer, these little jets are quieter and more fuel-thrifty than US Airways' aging turboprops. They will make it economical for the airline to continue flying to places like Omaha, Madison, Wis. and Mobile, Ala.
Pilots are not thrilled: A first-year regional-jet captain gets $51,000 for a work schedule that has him in the cockpit for 1,020 hours a year. That compares with $193,000 for a 12-year captain flying an Airbus A330 (who was making up to $336,000 six months ago). A pilot who is laid off and rehired at a regional starts at the bottom.
The pay-cutting started in July when US Airways was awaiting word on its $1 billion federal loan guarantee application. First officers on A330 jets were cut from $229,000 to $143,000; on Boeing 737s, from $152,000 to $111,000. Three days before filing for Chapter 11 on Aug. 11, 2002, grumbling pilots agreed to a six-and-a-half-year virtual freeze on wages, save cost-of-living allowance. Two days after United filed for bankruptcy on Dec. 11, 2002, US Airways pilots okayed a second round of wage givebacks, averaging 8%. "These were done under threat of liquidation," says Roy Freundlich, spokesman for the US Airways unit of ALPA.
"Everyone has had to make sacrifices, and the pain has been enormous," says Siegel. More torment is to come. Yet to be resolved is $3.1 billion in pension liabilities affecting 7,000-plus employed, furloughed or retired pilots. Average retired pilots expect 50% of annual pay, or up to $70,000. But Siegel says unless he's permitted to pay those obligations over 30 years, he will foist a $500 million obligation on the Pension Benefit Guarantee Corp. Most US Airways pilots could get as little as $28,000 annually.
Workers at United, American and other lines are now competing against a trimmed-down US Airways. How long can they prop up the wage scale?
12-22-2011, 04:59 AM
#4
Gets Weekends Off
Joined APC: Nov 2008
Position: Citation, left seat
Posts: 345
Seabury Group | Commercial Aviation: Labor Transformation
Seabury Group | Commercial Aviation: Cost Reduction
Check out these sections of Seabury's website if you have ANY question as to the intent of the company.
Seabury Group | Commercial Aviation: Cost Reduction
Check out these sections of Seabury's website if you have ANY question as to the intent of the company.
12-22-2011, 05:00 AM
#5
Bracing for Fallacies
Joined APC: Jul 2007
Position: In favor of good things, not in favor of bad things
Posts: 3,543
Post on every flight school door!! ALPA please link this on your cleared to dream web page! All the guys on here wanting to change careers....take note!! How does 28,000 grab ya for a "dream" job?
12-22-2011, 06:30 AM
#6
Gets Weekends Off
Joined APC: Jan 2008
Position: CL-65 captain
Posts: 2,244
Originally Posted by Skypilotsv1984
Seabury Group | Commercial Aviation: Labor Transformation
Seabury Group | Commercial Aviation: Cost Reduction
Check out these sections of Seabury's website if you have ANY question as to the intent of the company.
Seabury Group | Commercial Aviation: Cost Reduction
Check out these sections of Seabury's website if you have ANY question as to the intent of the company.
It's the Bob's!!!!!! They have finally come! i KNEW IT! They are gonna take my stapler!!!!
12-22-2011, 06:45 AM
#7
Gets Weekends Off
Joined APC: Jul 2008
Posts: 4,921
This is a great article. He used their pensions as the carrot that would be saved if ridiculous concessions were given (32 to 40 percent according to the article). They ended up taking more pay cuts after this and losing their pension. Siegel walked away with millions and now is one of the most hated CEO's US Airways ever had. It's the pilot's own fault for going along with it. It's a great article because we know the final outcome now. The pilots were played big time and are still paying for it big time.
12-22-2011, 11:25 AM
#8
New Hire
Joined APC: Dec 2011
Position: Senior Gear Puller
Posts: 8
This was taken off of Seaburys website under the title: Cost Reductions
"Seabury’s strong analytical approach bring additional insight to clients as they negotiate contracts. We show how contract provisions might affect the organization over time, and provide negotiation tactics that benefit the bottom-line."
Negotiating tactics that Seabury used to get US Airways pilots to concede up to 40% pay cuts. (They held the pilots pensions hostage to make them agree to the pay cuts). After the pay cuts were accepted, Seabury and Management took their pensions too.
They will try the same tactics with us!
We need to stand together and be an example. We need to show the industry that it is unacceptable for CEO's and upper management to run a company into the ground and then expect the pilots and employees to fix the problems they created.
If we are destined for bankruptcy, so be it. Its better that we send a clear message to Management and the entire Airline industry that we have drawn a line. Dont let the emergency that they created become our problem. We do our job right everyday, so should they.
Stay united
"Seabury’s strong analytical approach bring additional insight to clients as they negotiate contracts. We show how contract provisions might affect the organization over time, and provide negotiation tactics that benefit the bottom-line."
Negotiating tactics that Seabury used to get US Airways pilots to concede up to 40% pay cuts. (They held the pilots pensions hostage to make them agree to the pay cuts). After the pay cuts were accepted, Seabury and Management took their pensions too.
They will try the same tactics with us!
We need to stand together and be an example. We need to show the industry that it is unacceptable for CEO's and upper management to run a company into the ground and then expect the pilots and employees to fix the problems they created.
If we are destined for bankruptcy, so be it. Its better that we send a clear message to Management and the entire Airline industry that we have drawn a line. Dont let the emergency that they created become our problem. We do our job right everyday, so should they.
Stay united
12-22-2011, 04:28 PM
#9
Gets Weekends Off
Joined APC: Dec 2005
Posts: 156
"Poor planning on your part does not constitute an emergency on my part."
TRANSLATED for dumb pilots:
Labor Transformation
Seabury Group has built a strong track record and proven analytical tools helping clients make the most of the people they employ. Too bad slave labor is so 1800's Workforce effectiveness has a commanding impact on airlines’ bottom-line results. Not much else to cut besides laborStaffing levels require detailed analysis to optimize between overstaffing (which results with poor performance and unnecessary costs)running a quality airline and understaffing/improper scheduling (which results in deteriorated service levels and customer satisfaction) this is the goal!.
We bring our clients four key areas of expertise:
Workforce analytics
An airline needs precise, detailed models to understand the full implications of a change in labor practices. We'll tell you how we helped other airlines screw their employeesSeabury clients gain this insight through our costing and financial analysis process, which incorporates extensive industry data.extensive screwing Our team can model wide-ranging alterations, including wage rate changes, work rule scenarios (productivity agreements), healthcare plans and either defined-contribution or defined-benefit retirement plans. lots of ways we can show you to screw pilots
Process efficiency
Complex organizations sometimes overcomplicate day-to-day processes, making them more costly and fragile than need to be. Seabury Group has extensive experience mapping current processes, enabling clients to simplify and improve operations. Seabury also clarifies new roles and responsibilities to ensure smooth operations and clear accountability Maybe this is good
Manpower planning
How many technicians does an airline need on shift at 8:00 on Wednesday evenings?less than you have now How many baggage handlers are required at 1:00 on Saturday mornings? also less Seabury has developed highly analytical techniques to model the answers to these questions and formulate solutions for any labor-intensive business area. We can only hoep to have pilot robots some dayFor example, we’ve enabled clients to review the manpower planning of maintenance, catering, call centers and above-and below-the-wing airport support. Pioneering results include innovative shift structures that optimize manpower coverage,put everyone on reserve new standards that show which factors drive staffing levels and powerful change programs that have proven effective in environments involving collective bargaining agreements threats BABY!and other labor vehicles.BANRUPTCY!!! BYE BYE contracts
Optimized staffing levels
Even the best-run organizations accrue unnecessary staff. Seabury enables clients to identify areas where staff is not fully utilized and guides these groups in determining optimum staffing levels. Our team also has broad experience helping clients trim their workforce without operational disruptions.bust those unions!
TRANSLATED for dumb pilots:
Labor Transformation
Seabury Group has built a strong track record and proven analytical tools helping clients make the most of the people they employ. Too bad slave labor is so 1800's Workforce effectiveness has a commanding impact on airlines’ bottom-line results. Not much else to cut besides laborStaffing levels require detailed analysis to optimize between overstaffing (which results with poor performance and unnecessary costs)running a quality airline and understaffing/improper scheduling (which results in deteriorated service levels and customer satisfaction) this is the goal!.
We bring our clients four key areas of expertise:
Workforce analytics
An airline needs precise, detailed models to understand the full implications of a change in labor practices. We'll tell you how we helped other airlines screw their employeesSeabury clients gain this insight through our costing and financial analysis process, which incorporates extensive industry data.extensive screwing Our team can model wide-ranging alterations, including wage rate changes, work rule scenarios (productivity agreements), healthcare plans and either defined-contribution or defined-benefit retirement plans. lots of ways we can show you to screw pilots
Process efficiency
Complex organizations sometimes overcomplicate day-to-day processes, making them more costly and fragile than need to be. Seabury Group has extensive experience mapping current processes, enabling clients to simplify and improve operations. Seabury also clarifies new roles and responsibilities to ensure smooth operations and clear accountability Maybe this is good
Manpower planning
How many technicians does an airline need on shift at 8:00 on Wednesday evenings?less than you have now How many baggage handlers are required at 1:00 on Saturday mornings? also less Seabury has developed highly analytical techniques to model the answers to these questions and formulate solutions for any labor-intensive business area. We can only hoep to have pilot robots some dayFor example, we’ve enabled clients to review the manpower planning of maintenance, catering, call centers and above-and below-the-wing airport support. Pioneering results include innovative shift structures that optimize manpower coverage,put everyone on reserve new standards that show which factors drive staffing levels and powerful change programs that have proven effective in environments involving collective bargaining agreements threats BABY!and other labor vehicles.BANRUPTCY!!! BYE BYE contracts
Optimized staffing levels
Even the best-run organizations accrue unnecessary staff. Seabury enables clients to identify areas where staff is not fully utilized and guides these groups in determining optimum staffing levels. Our team also has broad experience helping clients trim their workforce without operational disruptions.bust those unions!
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