Pilots Go To Arbitration

[UpperDeck]

Seeker----Forgive me but that is Utopian, wouldn't you agree? We're NOT all equal so we don't have to concern ourselves with the concept of some being more equal than others.

You are one of a number of thousands of pilots. If you withdrew your services, your absence (no disrespect) would be akin to the loss of a drop in a bucket of water. The same is not true of the senior executives at Air Canada. If they are removed, they will have to be replaced and that particular bucket is a LOT smaller and its size will be reduced even more by reason of the way the Board deals with the current officeholder.

Sure, it would be great if the Captain of the ship helped stoke the boiler but it ain't gonna happen unless of course, the ship was going to founder and there were no lifeboats. In that event, the Captain might remove his stripes but only to save his own life.

[13820]

Sure, it would be great if the Captain of the ship helped stoke the boiler but it ain't gonna happen unless of course, the ship was going to founder and there were no lifeboats. In that event, the Captain might remove his stripes but only to save his own life.

Or "trip" into a lifeboat.

[Seeker]

Utopian? I'd hazard that CR could be replaced easier than any pilot and with less inconvenience and based on his recent performance I'd say the odds are that the new guy would do a better job to boot. The guy who manages the local Tim's might know much about airlines but I bet he'd be better at rallying the employees. The point is that if we had a shared frame of reference for pay above some base level there'd be a greater likelihood of success.

[moeman]

Every negotiation that goes by I'm amazed at how easy it is for AC to get the unions and their leadership to take their eyes off the ball. Focusing on Executive pay was this year's "shiny object".

[Lakelad]

.

Canadian companies urged to end stock option rewards

May 22, 2012 - Financial Post

Barbara Shecter

With Europe’s fragile economic outlook and signs of investor discontent beginning to spread, an influential group including representatives of Canada’s business, regulatory and academic circles is calling for an end to the popular practice of rewarding executives with stock options.

The Institute for the Governance of Private and Public Organizations issued the bold challenge as part of package of proposals aimed at reining in executive pay packets on Tuesday morning. They suggested a gradual reduction of stock options for senior executives, but “with a goal of eliminating this form of compensation.”

The organization, whose 15 directors include Yvan Allaire, Stephen Jarislowsky, and Guylaine Saucier, also called on company boards of directors to rein in the high price of chief executives, and to take full responsibility rather than farming out the work to compensation consultants.

The boards of publicly traded corporations “should set what they consider a fair and productive relationship between the CEO’s total compensation and median earnings within the firm,” the organization said in a 64-page policy document titled Pay for Value: Cutting the Gordian Knot of Executive Compensation.

The report was issued against the backdrop of what is being called the Shareholder Spring in the United Kingdom, and amid signs of growing investor impatience across the globe.

Outbursts in recent weeks over large pay packets and lacklustre performance have cost three chief executives their jobs. Gone are the heads of insurance giant Aviva, newspaper publisher Trinity Mirror, and pharmaceutical company AstraZeneca.

In Canada, some of the country’s biggest pension fund managers, including the Canada Pension Plan Investment Board and the Ontario Teachers Pension Plan Board, publicly backed New York based hedge fund manager Pershing Square Capital Management in its ultimately successful bid to replace directors and the chief executive at under-performing Canadian Pacific Railway.

Industry insiders say the heightened level of frustration is clear because the pensions were under no obligation to publicly disclose their support for the overthrow of what was deemed to be a complacent board.

"“But it is dangerous and unfair to continue with forms and levels of compensation that test and stress the ethics and values of senior management,”

.

[DEFCON]

"I suggest that when an employer can replace the skill set and effect substantial savings in wages, there has to be a significant "retention value" to balance the scale."

"retention value" as used above makes me wonder where the measure of "significant retention value" was realized before the 'substantial' retention bonus' was paid out?

[Dork]

At 3.75% of total labor costs if the pilots were paid nothing that would be a drop in the bucket. This is about pension theft plain and simple.

As for skill sets....better take a good look at the pilot demographic and backgrounds. Not so easy to replace but often sought after.

As for a complete downing of tools and walking away..as per Australia in 1989...recession would hit and it would take about 3 years to recover.

This is not realy about AC..rather the North American Robber barrons are back in town. They come every 40 years.

The loss of payroll taxes and pension income will hit Ottawa well after the corporate and government players are long gone. the average Canadian will shoulder the bigger consumption taxes to make up the shortfall.

Aviation is great....airlines are the new loan sharks. Thanks for your pension contributions now take off eh...

Dork

[AMEfirst]

Pension is the end game

Read Bill C33

2014 is the end of the break on pension deficit funding. What do you think will happen when the holiday ends and the deficit is greater 4 billion?

[Fido]

At 3.75% of total labor costs if the pilots were paid nothing that would be a drop in the bucket.

Where did you get this statistic from?

I have heard that pilots salaries at a typical airline are 50% of the wage bill.

Now I find 50% to be an unbelievable figure too, but <4%!

[better4me]

Where did you get this statistic from?

I have heard that pilots salaries at a typical airline are 50% of the wage bill.

Now I find 50% to be an unbelievable figure too, but <4%!

3.75% is the percentage of pilot employment costs to total expenses of the airline.

[better4me]

Pension is the end game

Read Bill C33

2014 is the end of the break on pension deficit funding. What do you think will happen when the holiday ends and the deficit is greater 4 billion?

If the holiday ends and there is still a deficit at AC, there will be a corresponding deficit for all DB pension plans. Several options could happen.

1) Gov't forces companies to cover the deficit immediately. Been down this road before so its unlikely to occur as the companies would all just declare bankruptcy and let the government handle the mess.

2) Gov't grants a new holiday for the companies to apply for and delays the pension situation another 5-10 years.

3) Miracle on the Euro and other financial crises happens and interest rates rise to the point where DB pension situation resolves itself.

4) Gov't mandates a new solution for all Canadians (e.g. if you over 50 you get DB pension, under 50 goes to DC pension with payout of the DB pension plan), rules applied to all DB pension plans accross Canada. 2015 is widely regarded as an election year, so this option will never come to pass.

My pick is door #2.

[moeman]

CUPE recently issued a memo regarding the possibility of granting AC another "holiday". It's definitely on the front burner.

[Seeker]

Air Canada is not the only company facing this pension issue - the government is working on a plan in case interest rates don't rise and solve the whole thing.

[dagger]

If the holiday ends and there is still a deficit at AC, there will be a corresponding deficit for all DB pension plans. Several options could happen.

1) Gov't forces companies to cover the deficit immediately. Been down this road before so its unlikely to occur as the companies would all just declare bankruptcy and let the government handle the mess.

2) Gov't grants a new holiday for the companies to apply for and delays the pension situation another 5-10 years.

3) Miracle on the Euro and other financial crises happens and interest rates rise to the point where DB pension situation resolves itself.

4) Gov't mandates a new solution for all Canadians (e.g. if you over 50 you get DB pension, under 50 goes to DC pension with payout of the DB pension plan), rules applied to all DB pension plans accross Canada. 2015 is widely regarded as an election year, so this option will never come to pass.

My pick is door #2.

That would be my bet, too, but there are other alternatives less talked about, for example, changing the legislation so that the deficiency formula doesn't have to be so utterly strict (AAA government securities). The US, for one, isn't so strict. I'd love to be a purist and continue adhering to the current formula, but with interest rates so bloody low, there is a lot of good corporates out there. Surely a top rated bank bond isn't any less secure than a government AAA because we know the feds would bail out a big bank rather than see it fold. At the least, the government could give DB plans 5-6 years where they could use some AAA corporates in lieu of AAA government paper. These funds hold some AAA corporate as assets, so why not let them use it in their solvency calculations.

[J.O.]

If we measured inflation the way we used to, it'd be about 7 or 8%. With that, interest rates would be much higher and these pension deficits would be history. But then that would destroy the big money agenda of killing pensions while making the rich even richer. What other reason could there be for it???

[Seeker]

Dagger;

You're right about this, the method and formula for calculating plan solvency is not divinely handed down from the gods - it's a calculation based on historical facts that seemed to work in the past, we're in an abnormal economic situation so maybe the method for calculating solvency needs to be modified. Management would love to "fix" this while we are in this situation but eventually the government will modify the rules acknowledging the special circumstances we all find ourselves in. This is not to imply that the "fix" will be cost-free for the employees because I don't necessarily think this will be so but I do not think that the government will allow the pension issue to take Air Canada, or any other company, down.

[dagger]

If we measured inflation the way we used to, it'd be about 7 or 8%. With that, interest rates would be much higher and these pension deficits would be history. But then that would destroy the big money agenda of killing pensions while making the rich even richer. What other reason could there be for it???

But the US measures pension solvency differently. Are you saying their "corporate agenda" is less aggressive than ours?

[rudder]

They are closer to a deal than this article indicates. Details of the rejected TA are out there. APA is asking to re-engage to write clearer language in the area of proposed work rule changes. Economic terms for the pilots include a 13.5% equity stake in the restructured company as well as immediate pay and pension uplifts. Not bad for a company masquerading as bankrupt.

[rudder]

The Allied Pilots Association is telling its members in a Thursday hotline that its board of directors has more time to review American Airlines’ last, best and final offer,” but not too much time –* only until Wednesday, June 27:

“At the request of APA and AMR management, United States Bankruptcy Judge Sean Lane has agreed to stay his ruling on our collective bargaining agreement until Friday, June 29. Judge Lane is presiding over the AMR restructuring case and is considering management’s motion to abrogate our collective bargaining agreement.

“The interim period is intended to give APA and management additional time to discuss and deliberate details of management’s ‘final offer’ and to develop related contract language. In voting ‘no’ yesterday against approving management’s final offer as a tentative agreement, Board members cited the lack of specificity in various areas and the need for additional time to properly analyze various contractual provisions and related language.

“Once APA and management have had an opportunity to address the APA Board’s concerns, the Board will vote again on whether to approve management’s offer as a tentative agreement. At Judge Lane’s request, that vote is to take place no later than close of business on Wednesday, June 27.

“Meetings between APA and management are slated to continue through this coming weekend. The APA Board of Directors will reconvene on Monday, June 25 following a weekend recess to provide guidance to the APA negotiating team in the ongoing discussions.”

[rudder]

American Airlines, pilots reach tentative contract

(Reuters) - Pilot union leaders at American Airlines reached a tentative agreement with management on Wednesday on a steep cost-cutting contract aimed at heading off a threat by the carrier to abandon the current deal in bankruptcy and impose stricter terms.

The Allied Pilots Association board voted 9 to 7 to send the last and best offer to its membership for consideration, the union and the company said.

http://finance.yahoo.com/news/american-airlines-pilots-reach-tentative-002343695.html

[conehead]

The Allied Pilots Association board voted 9 to 7 to send the last and best offer to its membership for consideration, the union and the company said.

That's a close vote...