Gone in 60 Days....

[Guest rozar s'macco]

We're led to believe that there is very little fat left to trim in terms of debt service costs, leases and so forth so a CCAA may yield very little on that front. That leaves labour, Jazz, and Aeroplan, and the government's oppresive tax regime to make up the difference. How about management cuts? No, not salary cuts I mean hundreds of superfluous busybodies being shown the door. If you're not producing, you're gone...or back to the shop floor, flight line, bag room etc that begat you.

As for labour, the "me too" clauses absolutely prevent targetted cuts to the areas where we are uncompetitive. All groups must defend their wages against industry benchmarks or be cut. What other option is there? This agreement prevents it that from happening! How can you restructure a company when the first thing done is prevent changes!?

I am left to conclude that CCAA is around the corner either way. It is the only solution.

[LongTimer V]

Hey Dagger as usual you have it wrong

Those hard working employees are trying to catch a quick coffee and bite

because they don't have time anymore to have a sit down lunch

Not like the thieving brass who work half a day and take the rest of day off with liquid lunches and cigars on a expense accountant i must add

I got to see the real Air Canada ivory tower when visiting headquarters in YUL on numerous occasions

I dined at the finest places and all on Air Canada's tab(ah that was fun)

So don't try to tell me where the REAL work is being done,cause it sure as $uck ain't in YUL headquarters

So go back to your little hole the real world is gonna eat you up

[buzz]

Yikes

Time to double up on the meds...

[Guest]

Were these two married to each other at one time??????????

[FireFox]

Were these two married to each other at one time??????????

Quite possible, but when they danced...who led?

[Canus Chinookus]

I'd like to know how much responsibility the management will take for steering AC back into major trouble? I mean, come on, Montie the scapegoat? He alone takes the blame? Sorry, I don't buy it. Just a question from an outsider, since it seems only logical that a management team that runs a company into the ground, and is then allowed to do it a second time probably shouldn't be at the helm.

[LongTimer V]

Canus,,,, my point exactly

[Airband]

Las Vegas casinos have no clocks; Air Canada has no mirrors.

[FireFox]

Another sticking point...if true;

>>The most powerful thing that differentiates our pension plans from the rest of the world is the fact our pensions ARE a deemed trust and shortfalls come before ANY other obligations in the event of a bankruptcy. The pension MOU clearly changes that. The agreement goes out of its way to clearly state that pension shortfalls are no longer considered a deemed trust and further that the shortfall becomes ranked as an UNSECURED creditor.<<

[moeman]

From ACPA:

Deemed Trusts and Our Pension Plans

Secondly, I would like to tackle the “deemed trust” issue. Again, it appears that many among us understand this topic with varying degrees of accuracy. I shall try to impart what I understand to be the facts as it relates to pension deficit and deemed trusts.

I have been copied and emailed often and asked about this quote supposedly posted on the forum somewhere: “The most powerful thing that differentiates our pension plans from the rest of the world is the fact our pensions ARE a deemed trust and shortfalls come before ANY other obligations in the event of a bankruptcy.” My apologies to the writer if this is not the quote, however, this is what I have been receiving in emails and did not bother digging to see if it is actually posted. Regardless, it has obviously the concern and the attention of many. There is no way to sugar coat it, this statement is completely and utterly wrong. In fact the opposite is true.

Any amount due a creditor that is considered a deemed trust and is owed by a Company that subsequently enters CCAA or bankruptcy, that amount has super priority status among all debts. As it has been explained to us by counsel, “(any) deemed trusts remove the money from the property of the insolvent company so that they cannot be accessed by other creditors”; it gets paid first.

Let me present three potential situations our pension plans could fall under: (1) normal PBSA (Pension Benefits Standards Act, 1985) funding regulations; (2) new proposed regulations for temporary solvency funding relief; and, (3) the MOU your MEC recommends you support.

In general, CCAA does not permit the unilateral changing of your pension plans by the court (or judge).  If a company under this protection is to restructure then pension benefits can only be modified if agreed to by the parties, namely current plan members and retirees. Any solvency deficiency (pension debt) must be paid in accordance with the current regulations, normally amortized over five years. Of course as we know, special relief from these funding requirements can be granted through a special amendment to the PBSA. This is what occurred in 2004 and is what we are seeking once again with this MOU.

The point in play here regarding deemed trusts, is what would happen in the event the Company becomes insolvent or liquidates. It is possible that a company could not restructure in CCAA and would have to liquidate, and in this case creditors would find themselves scrambling to ensure their bills are paid; pension plans would of course be one of those creditors. Ultimately the question becomes, “what happens to the funding of the pension plans if they are terminated or wound up?” How will they be funded and are they required to be funded under these circumstances? 

It is only OSFI (Office of the Superintendent of Financial Institutions) who has the power and authority to unilaterally terminate a pension plan or reduce accrued benefits. It is likely that pension plan termination would occur in bankruptcy and depending on a company’s potential (or lack of) for restructuring during CCAA, OSFI could exercise those same powers.

With these things in mind, the three potential situations for us today:

(1)  Under the PBSA, federally regulated defined benefit pension plans are not required by law to be funded upon termination. If OSFI were to terminate the plans there would be no requirement for funding at all. In this case we would not be entitled to anything beyond the current funding levels. There is no deemed trust status. If during CCAA and/or bankruptcy, any scheduled payments were missed then only those specific payments would be considered deemed trusts. I would like to emphasize that this would only apply to missed payments for current service or missed solvency payments that would normally occur quarterly. As you all know, the Company has a payment due Jul 30, 2009. If it missed that payment and filed for CCAA or bankruptcy Jul 31, 2009 then only that value would be a deemed trust. However, if it filed for CCAA or bankruptcy on Jul 29, 2009 then the Jul 30, 2009 payment would not be a deemed trust.  At no time would the past service debt, currently estimated at $2.85 billion, be a deemed trust.

(2)  This year (2009) under the proposed regulations to provide temporary solvency funding relief for federally regulated defined benefit pension plans, deemed trusts may apply. While the government is finishing up its review of the funding regulations as a whole, it has elected (because it is moving too slowly to implement changes to the regulations this year) to provide some quick and temporary relief in the form of an increase to the amount of asset smoothing that may be used and is permitting the solvency payment period be extended to ten from five years; there are more details to the permissions but will not affect the deemed trust discussion. If a plan sponsor elects to take advantage of these temporary changes to the solvency funding calculation, then the plan sponsor must accept the imposition of a deemed trust on any “relief” gained. In other words, if they choose to do this then the difference in the required payments between the normal funding regulations and the temporary regulations would get the special status. The conditions surrounding termination of (1) above still apply and only the deemed trust portion would be payable not the entire deficit. The amount of relief these temporary regulations provide does not help Air Canada; they still can’t make the payments and therefore are not opting to use these regulations.

(3)  The MOU your MEC asks you to support sets out a period of relief from any past service contributions to Jan 1, 2011 and then a predetermined schedule of payments out to Jan 1, 2014. Current service payments continue through the whole period. If any of these scheduled payments are missed and CCAA or bankruptcy ensues, they become deemed trusts as in (1) above. If you support the MOU, then the pension plans must be funded upon termination. The terminal funding requirement, lacking in the federal jurisdiction, has been written into this MOU. While the deficit still does not have deemed trust status, through the terminal funding clause, the amount of the total deficit does become due and payable at termination. Therefore, it would be on par with all the other unsecured debt existing at the time. That is not the case in (1) and (2) above as there is no requirement to fund the plans at termination. As our legal counsel puts it, “the MOU actually negotiates better protection, the terminal funding commitment which is arguably better than current law. Also the MOU’s snap back provisions would

eliminate all special relief given the Company and return it to the original status.” The snap back would compare what has been paid to what should have been paid and that amount becomes due and payable.

[FireFox]

Thanks for the clarification moeman.

[internet]

LongTimer V

I kindly ask that your edit your posts to correctly spell Dagger's name.

The multiple use of the spelling you chose indicates to me malicious intent. Many, including myself, believe that is a derogatory and offensive term some use to describe a segment of our population.

Thank you

[13820]

Not that there is anything wrong with that!

Thank you Jerry Sienfeld

[rudder]

From ACPA:

The MOU forms part of the collective agreement. And while all collective agreements remain in full force and effect during CCAA, there will most certainly be pressure within any restructuring plan to terminate the pension plans without fully funding them.

In addition, terminal funding presumes that there will in fact be funds available either through cash injection or proceeds from sale of assets in a liquidation to meet this committment. Not likely in AC's case.

Just a simple reality.

[Fido]

I do not understand how anyone could believe that there might be "Another round through CCAA" for Air Canada.

The pension issue took the company into CCAA back in 2003. The pension issue is there again this time as the sole reason for problems. There is no hope for any "restructuring" this time around.

There is no one that would touch this albatross. Any investor would be far better off to put their money into a new airline that did not have anything hanging around from the current company and with AC gone it would be a good investment choice.

No CCAA again, it would be straight to bankruptcy and the dissolution of the airline.

[LongTimer V]

Hey internet

Why don't you ask Dagger to do the same regarding my nic

I find that you are discriminating against me because you have not asked Dagger for the same

As far as describing a segment of our population,,not a chance.

Where did you get that from.????

Here's my source

http://www.slang-dictionary.org/Lexicon-of...39;-Cant/fagger

[FA@AC]

There is no hope for any "restructuring" this time around.

I could perhaps picture a CCAA restructuring during which the DB pension plans were jettisoned and labour costs in other areas were sharply reduced, but why any AC employee would want to go down that road is beyond me. A few have somehow got the idea that they'd benefit from a CCAA. The idea, from what I can gather, is that AC's BOD and entire management team would be given the shove, and that they'd be replaced by executives who would understand that the only way for AC to prosper is to triple the salaries of its employees.

The IAM NO vote I can understand. If the IAM deal was voted down by less than 1% over concerns that AC would move IAM jobs offshore, and if AC doesn't intend to make such a move it will be easy enough to come up with language that IAM members will be able to ratify.

How could any thinking ACPA-, CUPE- or CAW-represented employee even contemplate a NO vote? There is no money. Our own unions, having seen the books, have told us this. The government isn't going to bail us out, especially not if a CCAA comes as a result of our own choice to turn down extensions to our contracts. It isn't as if we're hard-done-by in the first place. People who work for other airlines in Canada don't receive anywhere near the salaries and benefits that most of us do. A 21-month status quo offer is generous under current business conditions. Anyone who thinks s/he'd do better elsewhere should go to that employer.

[Fido]

...., and if AC doesn't intend to make such a move it will be easy enough to come up with language that IAM members will be able to ratify.

.....

The trouble with that is that AC does not own AVEOS. AC cannot guarantee that AVEOS will or will not do anything.

[FA@AC]

The trouble with that is that AC does not own AVEOS. AC cannot guarantee that AVEOS will or will not do anything.

Ah I see. Perhaps somewhat trickier than I first supposed then, but I'm sure that those who are familiar with the intricate details of the AVEOS/AC relationship and the IAM-AVEOS/AC contracts will be able to work something out. Couldn't AC, for e.g., require that AVEOS continue to perform certain functions at certain locations as a condition of retaining its contracts with AC (assuming that the AC contracts are important to AVEOS)?

[Seeker]

People who work for other airlines in Canada don't receive anywhere near the salaries and benefits that most of us do. A 21-month status quo offer is generous under current business conditions. Anyone who thinks s/he'd do better elsewhere should go to that employer.

Hmmmm? "People" who work at other airlines don't receive as much in salaries. I think you have just highlighted the reason why the pilots and AMEs will/have vote/d NO. As a pilot, I am paid less than (Canadian) industry average for my relative place in the industry.

[Guest rattler]

I could perhaps picture a CCAA restructuring during which the DB pension plans were jettisoned and labour costs in other areas were sharply reduced, but why any AC employee would want to go down that road is beyond me.  A few have somehow got the idea that they'd benefit from a CCAA.  The idea, from what I can gather, is that AC's BOD and entire management team would be given the shove, and that they'd be replaced by executives who would understand that the only way for AC to prosper is to triple the salaries of its employees.

The IAM NO vote I can understand.  If the IAM deal was voted down by less than 1% over concerns that AC would move IAM jobs offshore, and if AC doesn't intend to make such a move it will be easy enough to come up with language that IAM members will be able to ratify.

How could any thinking ACPA-, CUPE- or CAW-represented employee even contemplate a NO vote?  There is no money.  Our own unions, having seen the books, have told us this.  The government isn't going to bail us out, especially not if a CCAA comes as a result of our own choice to turn down extensions to our contracts.  It isn't as if we're hard-done-by in the first place.  People who work for other airlines in Canada don't receive anywhere near the salaries and benefits that most of us do.  A 21-month status quo offer is generous under current business conditions.  Anyone who thinks s/he'd do better elsewhere should go to that employer.

Well said! The problem I see with most of those who say they are going to vote NO is that they have not thought about the consequences.

eg. Must have night shift premium back or I will vote no (kind of dumb unless the night shift premium is worth going on EI.

eg. I am going to vote NO because management always screws us...... translation, by voting no I am going to screw myself as there are not enough equivalent jobs in the market to ensure that I will continue to enjoy the same level of compensation for my labour that I now get from Big Bad AirCanada but I will sure show them!!!!!!!!!!!!!!!!! sorry wife / significant other and family........

[FA@AC]

I am paid less than (Canadian) industry average for my relative place in the industry.

Will that be the case 5 years from now? 10 years from now? Your "relative" place in the industry might be as high as one can get at the other carriers. A 737 captain at Westjet, Canjet or Sunwing is probably the highest paid pilot at his/her airline. An AC pilot is likely to earn 767, 330 or 777 pay at some point. In any case, your own ACPA representatives have told you that AC cannot pay you more than it pays you now at your position on the pay scale. Do you not believe them? They have seen the books. Have you?

Is it all about pay? How does Westjet's per diem system compare to what you earn under AC's? Vacation? Travel benefits? Are you willing to help clean aircraft during station stops? Work under WS' scheduling system? Deadhead (Y only) under their pay system? Have no pension plan? Lastly, if you'd be better of in all respects at Westjet or at whichever airline you have in mind, why are you at AC and not there? Something at AC must be better.

[Mitch Cronin]

Well said!  The problem I see with most of those who say they are going to vote NO is that they have not thought about the consequences. 

eg.  Must have night shift premium back  or I will vote no (kind of dumb unless the night shift premium is worth going on EI.

eg. I am going to vote NO because management always screws us...... translation, by voting no I am going to screw myself as there are not enough equivalent jobs in the market to ensure that I will continue to enjoy the same level of compensation for my labour that I now get from Big Bad AirCanada but I will sure show them!!!!!!!!!!!!!!!!!  sorry wife / significant other and family........

Hmmmm ...how to say this?....

Rattler, ...first, as Seeker points out, some are NOT paid "well above" at all... Some are in fact BELOW industry standard, AND below anything reasonable... Especially, in the case of AME's working midnight shifts without a dime extra for the extreme pains associated with that., imo.

Many have seen enough concessions. They give, the execs take, the shareholders take. The "three legged stool", as many of us been have been saying for a looooong time, has had one leg sawed off.

Some are not willing to lay down and get run over AGAIN!

Too much was taken last time, and it's already cost AC a lot. It's time to set that little fauxpas right.

...and, imo (as well as the o of others, evidently), if that means the airline can't fly, shame that that would be, so be it. The next employer will have to learn from that.

Everyone has their limit Rattler. Many of those in my line of work are right at that point.

As well... there are some who believe that AC will play these extreme conditions games to the n'th degree, just to squeeze some more dollars loose for the thieves, who don't give a flyin' fahootek for the long term stability of the company, and who'll just run with the money. (again)

Edited to add... EI isn't much of a worry for AME's either. The flying has to be done by someone, and they'll be needing their aircraft maintained.

[Seeker]

Will that be the case 5 years from now?  10 years from now?  Your "relative" place in the industry might be as high as one can get at the other carriers.  A 737 captain at Westjet, Canjet or Sunwing is probably the highest paid pilot at his/her airline.  An AC pilot is likely to earn 767, 330 or 777 pay at some point.  In any case, your own ACPA representatives have told you that AC cannot pay you more than it pays you now at your position on the pay scale.  Do you not believe them?  They have seen the books.  Have you?

Is it all about pay?  How does Westjet's per diem system compare to what you earn under AC's?  Vacation?  Travel benefits?  Are you willing to help clean aircraft during station stops?  Work under WS' scheduling system?  Deadhead (Y only) under their pay system?  Have no pension plan?  Lastly, if you'd be better of in all respects at Westjet or at whichever airline you have in mind, why are you at AC and not there?  Something at AC must be better.

Well, lots of anger in your post or maybe that's just how I'm reading it. Look, I don't need to get paid more - that's not the reason to vote NO. The reason to vote NO is because management is not being honest with us. They have a plan to reveal a "broader restructuring" after the contract extensions are voted in and I DON'T TRUST THEM. I plan to vote NO because I DON'T TRUST THEM, are you beginning to see a pattern? They promised that we would be the envy of the aviation world after the last restructuring if we would just make those concessions and then claimed that we were - for a year or two - until now suddenly we're completely broke, but - IDONTTRUSTTHEM! You see? They're a bunch of lying thieves. The reason for the 21 month extension is to give enough time for ACE, Cerberus and the rest of the pack to cash out their last ownership in AC. I guarantee you that if this 21 month extension passes that we will be back in a worse position at the end of it except that CR, RM and the rest of the merry band will be long gone over the hill.

5 Years? 10 years? Not going to happen unless we take the company away from the bandits.

[FA@AC]

Well, lots of anger in your post or maybe that's just how I'm reading it.  Look, I don't need to get paid more - that's not the reason to vote NO.  The reason to vote NO is because management is not being honest with us.  They have a plan to reveal a "broader restructuring" after the contract extensions are voted in and I DON'T TRUST THEM.  I plan to vote NO because I DON'T TRUST THEM, are you beginning to see a pattern?  They promised that we would be the envy of the aviation world after the last restructuring if we would just make those concessions and then claimed that we were - for a year or two - until now suddenly we're completely broke, but - IDONTTRUSTTHEM!  You see?  They're a bunch of lying thieves.  The reason for the 21 month extension is to give enough time for ACE, Cerberus and the rest of the pack to cash out their last ownership in AC.  I guarantee you that if this 21 month extension passes that we will be back in a worse position at the end of it except that CR, RM and the rest of the merry band will be long gone over the hill.

5 Years? 10 years? Not going to happen unless we take the company away from the bandits.

No anger here. I'm actually rather nonplussed about our current situation. I think that the IAM negotiators will reach a deal that their members can ratify. I think that CUPE and ACPA will both ratify, too. I could easily be wrong, and if I am I expect that settlements will be imposed somehow or other and that we'll be allright.

So, no anger on my part. I was just asking questions about how your compensation would compare to what you'd get elsewhere. Interesting that you have chosen not to answer any of them. You proclaimed your distrust of management 3 times in upper case. Is that a sign of anger? Is it a sign of anger that you're so erratic in the posting of your views? Upthread, in response to my remark about salaries you wrote

"People who work at other airlines don't receive as much in salaries. I think you have just highlighted the reason why the pilots and AMEs will/have vote/d NO. As a pilot, I am paid less than (Canadian) industry average for my relative place in the industry."

and in your next post you stated that salaries weren't a reason to vote no.

I understand your anger towards past management. From what I have seen so far, the new guy is nothing like them. He has negotiated openly and in good faith, and has concluded agreements (that might even turn out to be too generous for our own good) with our negotiators quickly. He appears to have arrangements in place, subject to ratification of our contracts, for financing to get us through this liquidity crunch. What else would you have had him do in the two months since he took over?

Do you or do you not believe your ACPA reps when they tell you that AC is broke? Whatever your reason to vote NO, what do you really expect your NO vote to achieve?