What do you think of Carty now?

[Guest Airmail]

I seem to recall Toronto Star reporter Jennifer Wells saying: "Robert Milton is not Don Carty. This is a sad shame, because Don Carty is just the kind of fellow you want running a troubled airline."

I wonder what she thinks of Carty now?

Jennifer Wells owes Milton an apology!

__________________________

American Airlines workers outraged at executive pension bankruptcy shelter

Associated Press -- Apr 17, 2003

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FORT WORTH, Tex. (AP) - One day after American Airlines employees accepted $1.8 billion in annual cuts, the co-operative spirit turned acrimonious over newly disclosed perks granted to executives.

One outraged union leader said Thursday that if workers had known earlier about a pension trust created to protect executives' benefits in the event of a bankruptcy filing, they might have voted against the steep concessions intended to keep the world's largest airline out of Chapter 11 bankruptcy.

The executive perks _ including possible large bonuses for a few _ were disclosed late Tuesday in a filing with the Securities and Exchange Commission. The filing was made just after the scheduled end of voting on the concessions.

``We are appalled and just disgusted,'' said John Ward, president of the flight attendants' union. ``It's the equivalent of an obscene gesture from management.''

The attendants initially rejected their share of the $1.8-billion cost-cutting plan but reversed themselves Wednesday after the company extended the deadline.

James Little, leader of the ground workers' union, said he may refuse to sign the concessions contract his members narrowly approved.

``If members had known about these compensation agreements, there would have been a higher turnout of `no' votes,'' Little said.

John Darrah, president of the pilots' union, said he is consulting lawyers and has asked management to rescind the perks.

According to the SEC filing, the company's board agreed to fund 60 per cent of a pension trust established last year for 45 executives. It also approved bonuses that will double the salaries of six top executives if they stay through January 2005.

American spokesman Bruce Hicks said the benefits were designed to retain top talent and were similar to deals at other major companies.

Hicks said the extra pensions were similar to a supplemental plan for American's pilots, which he said would also be protected in bankruptcy. Ground workers and flight attendants, who earn far less, have no such plan.

Donald Carty, chairman and chief executive, could get a $1.6-million bonus, based on his 2002 salary of $811,000.

Carty told workers last month that he would take a 33 per cent pay cut to demonstrate management's willingness to make sacrifices for the good of the company.

He made no public mention of the bonus he could get in 2005.

Few employees learned of the executive benefits until after they had approved concessions that call for pay cuts of about 16 per cent for flight attendants and ground workers and 23 per cent for pilots.

``It's pretty blatant to us that we found out about it after they disclosed it to the SEC,'' said Little of the Transport Workers Union.

``It was done intentionally that way to wait until after the voting process. This ... leaves the issue to us whether they were actually bargaining in good faith.''

Corporate spokesman Hicks said union leaders were briefed about the executive benefits, but under a confidentiality agreement that prohibited them from informing rank-and-file workers.

Little and Ward said they were given general information about executive compensation but denied being informed of the bonuses and pension funding.

``The only thing we were told is that (Carty) wasn't going to receive any bonuses,'' Ward said. ``We were not advised of anything like this.''

Analysts said the episode will further damage American's rocky relationship with its employees.

``This puts a huge amount of pressure on AMR to come clean with details of how and why this was done, and possibly even to change it,'' said Michael Miller, an aviation-industry communications consultant.

Shares in American parent company AMR jumped as high as $6 on Thursday on news of the employees' ratification of concessions. The

stock closed at $5, up 18 per cent.

[Guest Airmail]

April 17, 2003

Ms. Jennifer Wells
Toronto Star


Dear Ms. Wells:

In an article on April 3, you savaged Air Canada's CEO, Robert Milton, with a scathing and unfair comparison to Don Carty, CEO of American Airlines.

Now, the truth comes out and Mr. Carty's 33% pay cut and lack of a bonus which you lauded in your column has proven to be nothing more than a clever ruse (as detailed in an Associated Press dispatch dated April 17, 2003).

You have unfairly attacked Mr. Milton, injured his reputation and used highly questionable information to support your position. If you have any sense of decency, fair play and justice, and to protect your credibility as a journalist, you would immediately admit your mistake and offer a sincere and public apology to Mr. Milton in a future column.

The record will show that, unlike Mr. Carty, Mr. Milton did not take a bonus last year and there is no evidence of any "sweetheart" deals for him at Air Canada. In fact, if a recent Globe and Mail article is to be believed, Mr. Milton (unlike Mr. Carty) actually turned down what was described as a "lottery-sized" compensation package offered to him by the Air Canada Board of Directors last year due to his concern that such a deal would not be acceptable at a time when personal sacrifice was required.

This is indeed a tale of two airline CEOs. One CEO publicly trumpted his actions (which you fell for hook, line and sinker) while the other chose to more discretely let his actions speak louder than words. I, for one, know which of the two I'd chose.

[Guest M. McRae]

April 17 — The union that represents 35,000 American Airlines ground staff said Thursday it would not sign a deal to help save the ailing air carrier after finding out about a special arrangement that would preserve some top executives’ pensions even if the airline went bankrupt. The decision could force the airline to file for bankruptcy, which it had threatened to do earlier in the week if its unions did not agree to deep wage concessions

http://www.msnbc.com/news/901793.asp

[Guest]

I love this line from the article "American spokesman Bruce Hicks said the benefits were designed to retain top talent and were similar to deals at other major companies."

Retain top Talent???? Where are these guys going to go? the entire industry is in shambles and know one is hiring.

[Guest Dockjock]

Management talent spans industry boundaries. Airline managers are in general respected as people who have unparalleled experience in labour relations in a highly complex industry setting. Retention bonuses, as offensive as they are, prevent the people who are needed most from bailing to another potentially profitable industry (unlike airlines) where they can make more money for less work, less stress, further from the public eye.

[Guest]

Hog wash, this is nothing more than corporate greed,I seriously doubt that any firm would want to have anything to do with these execs after seeingthe legacy that they are leaving behind.
Would you an an employer truly want to hire an exec from UAL knowing very well that this person was partly responsible for taking a once great airline and in a matter of a few short years put this company into bankruptcy protection,I would not.
I wonder how many execs from Enron and Worldcom are being swooned by other companies,I suspect not many, the same would apply to airline execs.

[Guest Dockjock]

You're right, once the company has failed their reputation is crap. That's why they all try to bail at the first sign of trouble...and why the company then pays them retention bonuses to keep them. Yes they are weasels.

[Guest]

I admire your sense of political correctness,I would have said something similar to"low life bottom dwelling scum suck sub human incest bred pig eyed sacks of dog crap" But I won't!