For AC Pilots

[inchman]

The only way to have your arguments hold water is to assume that each of the creditors or suppliers will continue to do business with Air Canada at their pre-CCAA rates.

That is patently not the case. In addition to not getting paid for the last couple of months prior to CCAA, most suppliers contracts will be fully renegotiated or completely repudiated.

I would suggest if you took any sum of suppliers totalling the annual cost of employees, you would find that, in addition to only getting a small percentage of their pre-CCAA invoices, the suppliers hit and their contracts looking forward took a far greater hit than the $1 billion given up by employees.

I'm not suggesting that the employee contribution was not significant and difficult to swallow, but the gist of your post seems to be that the employees took the only hit going forward and infer that all of the outside players will take a bit of a haircut on their previous billings but continue to do business as usual with Air Canada and that is simply not the case.

[Guest neo]

Not at all, Dave. That is not the gist of my argument.

Creditors that are current suppliers of goods and services to Air Canada will do business with us in future (if they wish) at rates that they will negotiate. Will, for instance, our commissary, ATC, and fuel supplier now sell us their products at a cheaper rate? Some may, but some may not.

Furthermore, any cheaper rate negotiated with creditor/suppliers is analogous to the cheaper rate that AC's employees are providing for their services. And if these suppliers had CONTRACTS with AC establishing certain rates for their services, then the renegotiation of their expected earnings should be reflected in their future ownership, just as it should for AC's employees.

I think it would be difficult to read my original post carefully and take from it that, "employees took the only hit going forward..." The post clearly states where the disparity lies: that for the hit they take, creditors will take ownership in Air Canada, while for the hit _they_ take, AC's employees will receive nothing.

If you can justify an approximately $6 Billion dollar hit to our wages with precisely not one shred of ownership in return, then kindly bring the argument forward. Thus far, your comments have only reinforced the analagous situation the creditors and employees are in, and highlighted the disparity between what they have received.

Best wishes,

Richard

[dagger]

If you want to consider only future dollars, then the aircraft lessors should own the airline. Their future reductions on existing leases will be on a magnitude of 40 percent.

And debtholders who have several billion in debt converted into equity lose 100% of their holdings, with the hope of recovering some of that through share ownership, just as you will hope to recover some of your losses through profit sharing. Moreover, their losses are permanent, while yours are for a specific term and may, if the airlines' finances permit, be addressed in a future round of bargaining.

Finally, there is the obvious fact that what is happening at AC is happening around the world in different degrees. Your sense of loss reflects an outdated perception of entitlement based on wage scales and contract clauses that were built up over decades as a Crown corporation. Now, AC is compelled to pay market rates for labor, for aircraft, for fuel, etc. The key word is market rate. There is no Canadian airline willing to pay your former pay rates, and as a result AC is unable to do so either. The same thing is being repeated in the US, and in lesser degrees in Asia and Europe. You can call it a race to the bottom all you want. But the reality is that your former pay scales and benefits are unsustainable.

You can cry and you can whine about it until the cows come home all you want. AC has to have competitive labor conditions. That doesn't mean you can have guaranteed remuneration and pay scales 20-50 percent above the guarantees for comparable flying at other airlines, especially at airlines whose employees are risk-sharing through profit-sharing and are happy to do so.

[dagger]

Once again neo, this is about proportion. Your hit is what, 15-25% ? A bondholder is taking a 100% hit with no guarantee that the stock he/she gets will be worth the paper it is printed on.

Here's an idea for you. It guarantees to level the playing field with other creditors. Take all the money you have been paid for the past, let's say, three years, and just buy "New AC" stock. Every penny you made is returned to the company in exchange for stock. Then you are on the same footing as bondholders. Or to make it easier, in lieu of paying a lump sum representing the past three years' earnings, just agree to work for no cash pay for the next three years, and just get paid in "New AC" stock.

[dragon]

Dave,

Like him or not, NEO strikes me as with it enough to comprehend that. I took the gist of the post to infer going forward, as opposed to what . . . was.

One, and perhaps the only great and unprejudiced motivators remaining, is money. One way we could have cut across all employee lines [big challenge at AC these days] would have been with a fair and properly constructed profit sharing structure, rather than some buckshee and unaccountable system, full of loopholes, like the one currently set up. RM wants to be like WJA? Sure he does. What he meant was be like Air Canada has always been, just with WJA wages, sans the profit sharing.

Was a terrific opportunity, Employees would have scored, Milton may have scored, the stake and bondholders would have scored and yet another opportunity p*ssed away..

That’s how I understood the comments.

cheers

[dragon]

Only have a second Neo, and no agreement in front of me to reference.

1) That opportunity expires next month, does it not? [are we talking about the same thing?]

2) Correct – I am not holding out much hope for anything other than the usual. Cost of living over the agreed upon structure but of course anything is possible I suppose.

3) True. And if it does, we will be in a less desirable situation, ala CAI did . . .

4) This is true. Milton has a gold mine till 2009, the only re-negotiating will be in our dreams.

Have to run, off to the park for a nice family day.

cheers

[Guest O. Ring]

Quite some time ago I posted some details of the US Air restructure negotiated by the Seabury Group. I don't recall all the details but do recall the "old shares" became worthless and various groups (employees, debt holders etc.) receive "new shares" as part of the restructure. I believe the pilots receive 16 or 19 % of the new issue.

Is this the sort of thing you are suggesting?

[DEFCON]

Perhaps with almost 2B in pension funds owing AC will pay up at a lower rate, as in "new stock"?

[DEFCON]

No one seems to mention the hit every employee shareholder has taken right along with the other stakeholders.

[dagger]

Shareholders will all take the same hit, employee or non-employee.

[Guest V1V2Vgo]

Richard,

I do not dislike you, in fact I thought you were quite pleasant when we worked together at Air BC. (During your second stint there, I believe)

If you check the time of post, your glowing tribute to safety at AC was posted AFTER my post, thus, (A) I am not psychic, and ( your point is moot, for all I know, you could have posted your positive outlook in response to mine. I believe that constitutes a rational arguement, and I await your reply.

Further, we all like to whine a little, but it does drag people down after a while. NOBODY is thrilled about the new deal, but when the chips were down, 9 out of 10 pilots voted in favour of the TA. I do believe that puts you squarely in the middle of a vast MINORITY. Your thoughts?

I am surprised that a poster of your longevity would take my comments personally, it is not you that I dislike, it is your attitude. We are still in a very tenuous position at AC, we need everyone on board to ensure the survival of our careers, and our airline. This, also, IMHO, constitutes a rational arguement. Have a great day, RR.

Kindest regards,

V1V2Vgo

[Guest Dash 3]

Pure hubris...keep it up.

[Guest WA777]

You say:

"AC has to have competitive labor conditions"

Notwithstanding all the changes going on, the FACT is the new AC pilot wage rates are now amongst the LOWEST in the world for a MAJOR airline...Will that be enough to make up for misguided mangement....probably not...only time will tell. If in fact you and Milton now consider AC a DISCOUNT airline then the rates are probably competitive......the trouble is I don't......

[pictues]

Okay but the contract is still better then NO JOB AT ALL, just ask the Canada 3000 pilots.

[dagger]

Whether one calls oneself "discount" or otherwise is immaterial. They fly the same aircraft. They abide by the same general safety protocols and regulations as you do.

The market is inherently price driven. People don't want to pay for the perks they once expected as part of a full-service package.

Your competition is Westjet and Jetsgo and Skyservice and Air Transat and Canair. Soon, it will be JetBlue and maybe Southwest. The consumer is voting with his wallet. You may believe you can live by artificial distinctions like "discount" and "full service" but they are largely irrelevant. The question is what is the market charging and what is the price point at which the market resists higher pricing. I would submit to you that irrespective of what you choose to call yourself, the market price is set by the discounters and resistance begins to set in if AC prices itself more than a few dollars above the general discount price level.

[Mitch Cronin]

Dagger, that point of view seems to completely discount what the employee will contribute to the success of the airline. Will our employees put out like those of Westjet, Jetsgo, Skyservice, Air Transat and Canjet? Are their employees being treated like chattel? Or are those management teams so callous when it comes to treatment of it's front line staff?

I'm pretty sure your buddies in the ivory towers think we're nothing more than liabilities, and with that attitude so evident, we just may continue losing ground on the competition I'm afraid.

[Guest neo]

Hi Big 'D',

Thanks for your support.

I've long considered inchman among those who view my posts with an open mind. When I put out an idea like this, I expect it to be challenged. I welcome it, in fact. The thing I like about Dave is that if he believes he has a rational argument against you, that's what he provides. And unlike dagger, rance and Vetc have done in this debate, inchman never resorts to a personal attack if he doesn't have a rational argument against you.

Dave seems willing to judge an idea on its merits alone, regardless of how it sounds or where it comes from. To my mind that's the basis for sound debate, and Air Canada needs people like that in every area in order to rebuild something new, rather than just having a new start to the same old dysfunctional mess.

Best wishes,

R

[Guest neo]

Sure the contract is better than no job at all. But one must never give that possibility more weight than it deserves. Because in addition to that possibility there are numerous other ones, all the way out to a contract that provides us the best pay and working conditions in the world.

I suggest that the most productive point of view lies somewhere between those extremes, and may well include types of compensation that Air Canada employees have to this point not considered.

Best,

RR

[Guest lupin]

Employee moral is directly linked with productivity.With that being said,I don't know of any way to make cuts on the employee group without affecting moral.

On one side you need to lower costs to be able to compete with your competitors which are aggressively gaining market share but on the other side,you create instability in your work force by doing those much needed cuts.

Knowing where to cut seems like the hardest thing for a company to do.Too big of a cut in an area affects your performance which in turn affects your operating cost and customer satisfaction.Its like cutting with a double edge knife.

so where do you cut???

Lupin

AME yul

[Guest GDR]

Hi Richard

I think where we all get off on tangents here is that we have trouble separating your belief that the best way to vote was against the TA, from your basic suggestion that there should have been more provision in the TA for employee ownership.

While I still believe that a yes vote was the way to go, I do share in your disappointment with the apparent lack of provision for employee ownership in the TA.

I hope that Philp is right when he suggests, at least as I understand it, that there will be a degree of employee ownership come out of the courts.

We'll see.

Greg

[Guest neo]

I suggest you go back and check the times of those posts against your claim. My glowing tribute to AC's safety consciousness was posted at 11:40AM on Saturday morning. It was followed by three other posts all addressing the topic positively. All four of those posts were made prior to your comments posted at 11:07PM on Saturday night. Your comments would only constitute a rational argument if they had some basis in fact. But as anyone who cares to check can see, they do not.

Whining would be complaining with no constructive element to it. I don't do that. I am a frequent critic of things that happen in both my union and my place of employment. When I do so, I'm careful to provide an alternative course of action that could have provided a better outcome.

Posters of my longevity can usually spot the difference between someone who simply gets carried away in rebuttal and someone who resorts to constant personal attack in order to disguise the fact that he has no rational argument to counter one's own.

For example, what conceivable difference does it make to the validity of my argument that it comes from someone who voted in a minority on our recent contract? How is that in any way connected to whether or not my viewpoint is valid? The simple answer is that, it is not. What you have done is attempt to marginalize my argument by pointing out that in one particular vote, I was in the minority. This is perhaps a more subtle variant of personal attack, as opposed to some you have resorted to in the past, and in stark contrast to inchman and dragon above, who simply offered counter-arguments to my viewpoint.

If you believe that AC is in a tenuous position, I think that's reasonable. If you believe that AC's employees are going to work for the next six years under the currently negotiated regime, and remain motivated to pull AC out of its difficulties, your belief is less than reasonable. And what is it that you think you're rebuilding? The same old, same old? Where exactly does the NEW come into the New Air Canada?

If you don't have something fundamentally new to offer in the rebuilding process, then you are content to go down the same path that got us into this mess in the first place. I'm not content to see that happen. Employee ownership is a cornerstone of a sound labor-intensive and competitive enterprise. Reject the concept if you wish, but be prepared to see your current sacrifice wasted.

Have a great day too,

neo

[DEFCON]

Mitch

With all due respect, I’m not sure what you’re looking for? AC the corporation is a victim of SARS, 911, a changing market, government interference, bad management, and last but certainly not least, an overly expectant and demanding labour group.

On several occasions over the last few years I’ve asked how it is that a company in perpetual loss continued to reward their employee groups with a greater percentage of a shrinking pie. Generally speaking, that question has gone largely unanswered. Perhaps bad management is to blame however, labour certainly was capable of opening its eyes and looking forward, was it not?

IMO, management and labour are behaving like and planning a return to the same old way of doing business which will almost certainly bring the corporation right back to where it is today. IMHO “beauty is only skin deep”! Perhaps I’m too close to the fire however, it would also be my opinion that, unless extreme measures are undertaken to remodel the corporation I’d never again invest in an AC that’s only put on new makeup to disguise an extremely disfigured body.

[Guest neo]

My goodness, V1V2Vgo. It's not easy keeping up with your deletions! I'm guessing you realized how wrong your comments were, and wisely took them down.

Nevertheless, I hope you'll repost something that addresses the issue this time, rather than being about your attitude towards me.

neo

[Mitch Cronin]

In my opinion, it's not so much about cuts as it is about attitude.

Two dog owners, both going broke, can't buy their dogs any food for days. One is still very kind to his dog, the other treats his dog like crap...

Which dog is more likely to continue serving his master?

Cut when you have to... but some of this is more like expecting a machine to continue developing max rpm when you're taking oil out and blocking off the coolant.

[Mitch Cronin]

I agree with your summary of what AC has become a victim of... What am I looking for?? A management team that demonstrates that it understands it needs it's employees for survival, and one that, with that understanding, treats it's employees well.

Our upper management could be doing a hell of a lot more to ease the pain of the cuts we've been hit with. Simple stuff like communication... burying the whips, and putting away the wooden spoon.

Instead, they're busily avoiding communication, wetting the whips and lining the wooden spoon with lead. ...and expecting production will improve as a result!

If we're not being led by blind fools, then I'm awfully eager to hear what their strategy is?

imo