TAMC Newsletter, Teamster Aviation Professional

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Volume 3, Issue 11 of the TAMC Newsletter is Ready to Read

The eleventh issue of the TAMC (Teamsters Aviation Mechanics Coalition) newsletter Volume 3, Teamster Aviation Professional, is out and ready to read. Check out the latest news from the TAMC today.

Click here to read the newsletter.

The latest newsletter focuses on important developments for mechanics and related in the airline industry, including:

• New proposed maintenance rules from the FAA and what they could mean for safety and outsourcing;
• A new book, Attention All Passengers, by TAMC friend William J. McGee on the perils of outsourcing and the decline of our industry;
• Recent progress toward reaching an agreement on the UAL-CAL-CMI amalgamation;
• A TAMC member report on a recent infoshare event about aviation safety;
• An explanation of the Teamsters’ floor structure, from the rank and file to Local Union leadership to the International’s Airline Division;
• A brief holiday message from the TAMC Steering Committee.
  

With yet another newsletter packed with important news and useful information, it is critical that this edition be distributed to all the aviation mechanics and related members represented by the Teamsters. Please take some time over the holidays to read this newsletter and share it with your coworkers.

Read it today!

The Teamster Aviation Professional is the official source of communication between the Teamsters Airline Division and the 18,000 Teamster mechanics and related craft members. This newsletter of the TAMC contains information about what our union is doing to fight outsourcing, secure wages and benefits, and ensure that airline mechanics everywhere are treated with the dignity, respect and fairness they deserve.

Happy Holidays!

Mechanic Dispatch

Seniority Integration Committee Update 

The Seniority Committee met this week to discuss the remaining aspects of combining the three company seniority lists. The task before the committee is to create recommendations regarding seniority integration and its impact on the various contract articles of a Joint CBA. 

The committee decided on 2 representatives, (1 sUA and 1 sCO), who will assist the negotiating committee by clarifying the intent of the SIC recommendations. 

The different scenarios regarding lead and inspector seniority was discussed at length and it was determined that there would be a resounding impact to either group no matter which path was followed. Various ways to reduce that impact were discussed but in the end the group determined that following basic craft seniority principles (rather than a premium system) would be the most consistent and cleanest method. It was also determined that following craft seniority could provide more protections and allow for greater mobility by using a single craft seniority method.  

Two of the more simple resolutions included an agreement to take a position to retain lifetime recall rights, and a method to settle ties in seniority. While the three previous topics were discussed and settled, there were other subjects that were not decided on. These include discussions surrounding such issues as breaks in seniority affecting CO and MCI mechanics but not UA. How to level this point will require further discussion as well as more detailed information from the company.  

Other points that require further consideration include former management seniority adjustments, and Furloughed UA technicians currently working for CO. The committee felt more information and time was required to resolve differences and reach a consensus. An important item for the committee is maintaining adequate furlough protection language in a Joint CBA. A list of information needed to proceed was compiled and will be delivered to the company. 

The next meeting will be during the second week of December. Along with continued discussions on open issues, the committee will review information supplied by the company and continue the arduous task of reviewing the seniority lists for errors or changes.

 

Airline Division working on Merger Policy 

The Airline Board of Directors held its quarterly meeting on November 27^th and 28^th. A primary topic of discussion was the creation of a Division-wide merger policy. The Board members were given examples of how other unions have approached seniority list integrations in the past. These examples included integrations that have worked and others that have failed horribly. There was discussion also of the recent integrations that have occurred and which are occurring within the Division. It was also noted that the USAir pilots group currently represented by USAPA has been without a new agreement for 8 years trying to achieve a mutually acceptable solution for seniority integration. Their internal dispute regarding seniority integration has cost that pilot group millions of dollars in the form of lost opportunity costs, including wages not earned.

The Division’s Board members agreed that a Division-wide policy needed to be adopted by the Division because consolidation of the industry will continue. The Board discussed that a policy based on “date of hire” or “date of entering the craft” has considerable merit and should be included in the policy of the Airline Division.  

To that end, subcommittees of representatives from the IBT-represented crafts are now assigned to begin the construction of a merger policy based on the “date of hire” and/or “date of entering the craft” approach. These sub committees will work towards preparing a draft that can be reviewed at the next Board of Directors meeting in March for possible adoption.

Paper FAA Certificates Will Expire  

For those of you who still hold a paper license, stop procrastinating. Your paper license will no longer be valid on March 31, 2013. That means you can’t work! The good news is that it’s easy and painless to replace and it only costs $2.00. 

Just go to this link:

http://www.faa.gov/licenses_certificates/airmen_certification/expiring_paper_certificates/

 

Or search Google for “FAA Paper License Replacement.” 

All paper certificate holders cannot exercise the privileges of their PAPER certificates after March 31, 2013. This includes all certificates that are issued under 14 CFR Part 63 and 65. 

14 CFR 63.15(d) and 65.15(d) reads:

Duration of certificates. Except for temporary certificates issued under §63.15 and 65.15, the holder of a paper certificate issued under this part may not exercise the privileges of that certificate after March 31, 2013. 

If your airman certificate was issued after July 2003 and is a plastic certificate, it already meets the paper-to plastic rule as specified in 14 CFR Parts 63 and 65 and you may disregard this notification. 

 

Inspection Compliance 

Please be sure if you are upgrading to inspection on the sUA side that you follow the proper procedures. Until bid area 301 is established in the hubs upgrades will continue. Don’t get into trouble with the FAA during this transition period; if you’re not sure call the inspection management group. Look for a more in 

depth report in a future issue of the Dispatch. 

Mechanic Contract Books 

Many members have asked when the company will print the new agreement. A grievance has been filed out of SFO on the matter. However given the timing of the expedited negotiations there will most likely be a new agreement in place prior to the printing of the transition agreement. To be clear, the printed copy that each member received in the mail prior to ratification is the agreement in place currently. If anyone would like an electronic copy of the agreement it can be found here:

 http://www.teamster.org/sites/teamster.org/files/112911MasterTA.pdf

Pearl Harbor Day, December 7.

President Roosevelt delivers the "Day of Infamy" speech to a joint session of Congress on December 8, 1941. Behind him are Vice President Henry Wallace (left) and Speaker of the House Sam Rayburn. To the right, in uniform, is Roosevelt's son James.

TEAMSTERS TAKE STRONG POSITION ON PROPOSED AIRCRAFT MAINTENANCE RULES AND OUTSOURCING

The Teamsters Airline Division believes that while many of the recently proposed FAA regulations concerning aircraft repair stations adequately address safety issues, other rules fail to deal with the dangers posed by outsourced aircraft maintenance. The Airline Division submitted comments in a letter to the FAA regarding proposed rules that raise concerns about standards for certification and work performed by foreign repair stations. Read the full letter here.

Mechanic's Dispatch

On November 13^th the Airline Division hosted a meeting of Principal Officers, Business Agents and the ten rank and file members of the National Seniority Integration Committee representing the new United Airlines. The Airline Division called the meeting in order to resolve disagreements among the National SIC over what method should be used to integrate the seniority lists as well as the applicability of the Consent Decree. The Division believed it was in everyone’s best interest to resolve these disagreements promptly, as both suggested alternatives had the very real potential of winding up in federal court and in front of an arbitrator. If that happened, the amalgamation negotiations would have ground to a stop until the federal court litigation and arbitration were completed – processes that likely would take years to complete.
The meeting began with introductions and a history of what had transpired over the course of the last year. It was explained to the group that there were several legal opinions gathered as well as the input of Arbitrator/Mediator Ralph Berger regarding the Consent Decree and its applicability to the combined group upon ratification of an amalgamated contract. All of the experts agreed that efforts to terminate or amend the Consent Decree through federal court litigation likely would not succeed given the high legal hurdles that exist. In addition to the limited chance of success, the Principal Officers agreed that the litigation process would be lengthy and extremely expensive. It was felt the better course of action was to secure strong job protections, including no-furlough protections as strong as or even stronger than the ones that are in the existing agreements. The Principal Officers also agreed that two members of the National Seniority Integration Committee will assist the negotiating committee to help achieve these critical job protections.
The Airline Division also addressed the idea of a rank ratio for the purposes of bidding. It is the opinion of the Division that this idea goes against the very core of unionism and has been destructive in other work groups that have used it.
The group was also made aware that the 55 member rank and file steering committee recently agreed to enter expedited bargaining with the carrier.
The Airline Division then informed the group that it would not commence or support litigation seeking to terminate or amend the Consent Decree, and that it opposed the use of rank ratio method to integrate the seniority lists. The Airline Division also advised that it would not finance any federal litigation or arbitration regarding these matters. The Principal Officers were then asked if any of them planned to either appeal the Decree or attempt to arbitrate for the purposes of rank ratio. None of the Principal Officers were willing to proceed down these paths. The Airline Division then declared that this matter is now considered closed institutionally and the integration will proceed under the constraints of the Consent Decree and without using a rank ratio method to integrate the lists.
The committee now has several issues to work through including how to handle premium seniority, how to fairly apply the rules of the Decree for the sCO and sCMI groups, as well as other matters, such as tie breakers for future employees.
The committee will meet on November 27^th -28^th with a follow up meeting on December 10^th -14^th. Future dates will be discussed at these upcoming meetings

National Seniority Integration Committee Survey

October 18, 2012
Survey fielded to assist the National Seniority Integration Committee
The Airline Division has fielded a survey and it is now available at:
http://surveygoldplus.com/s/2B85473BE6084779/35.htm.
The reason for the survey is to offer the entire membership the chance to weigh in on the different ideas suggested by rank and file members of the national seniority integration committee.
This survey is designed to help the committee respond to the desires of the members in regards to the different proposals.
The results will be tabulated by each subsidiary group in order to properly gauge the will of each group moving forward.
All members are urged to participate as the outcome could lead to either continuing the process of expedited bargaining or spending years in court as the issues are litigated and or arbitrated. The rank and file seniority integration team meets again the last week of October so it is important that you participate now as the survey will close on October 28^th.
Please ensure that your coworkers are made aware of this survey.

 October 12, 2012

Airline Division meets with new Senior VP Tech Ops

On October 9th, Airline Division Director David Bourne, Attorney Ed Gleason, and Representatives Clacy Griswold, Paul Alves and Bob Fisher met with Greg Hart, the new Senior VP of Tech Ops along with Doug McKeen and Mike Bonds. This meeting was solely for the purpose of meeting the new Vice President. While no business was discussed, the Airline Division explained that one of its top priorities is and will be continuing to recapture work lost through previous outsourcing. The meeting went well. On a related issue; recently a management change occurred for the sub United GSE and facilities mechanics. Mike Lorenzeni has moved on and Ray Ames will assume his duties in regards to these two groups. Ray will report to Joe Ferreria in Tech Ops.

Negotiating Committee Correction

One name was inadvertently left off the list for the national rank and file negotiating committee. Allen Cosides was left off the list but will be attending negotiations as the national coordinator for the GSE members across the system. Allen’s presence will not affect the makeup of voting members, but he will have input to all issues concerning the new agreement.

Committee Update

The negotiating committee met September 20th and 21st in Denver for the purpose of creating an abbreviated opening proposal for the amalgamated agreement. This is one of the preliminary parts of the expedited mediation process. The committee spent the two days looking at each of the articles and proposals suggested by the members and steering committee and placed them in an order of importance.The group met again the week of the 24th and spent the time working in small subcommittees reviewing each line of each article of the three agreements including the new proposals and created recommendations to the various differences. There were many distinctions and each of these was placed in positions of importance.

The work was concluded this week in Chicago where the team took the results of the previous two meeting weeks and created a combined plan which will be sent to the company. This step will begin the back and forth dialog with the company defined in interest based bargaining. With this step in place, the expedited negotiation process can begin.

One final hurdle which remains is the official NMB Expedited Negotiating Training. The Team is waiting on training dates which can only be issued from the NMB. We have repeatedly made requests and expect the call for training to happen at any time and the committee is standing by and ready. This training for the new NMB procedures is an important requirement of the expedited mediation process.

Benefits Committee Update

Since the last Benefits update, the committee has met on three occasions to continue working on finalizing the opening proposals for benefits and pension. With the continued help of Hemant Berry, Assistant Director, Benefits Department for the IBT; and Pete Hardcastle, Pension Consultant from Cheiron, a recommendation will be given to the negotiating committee within the next few weeks, so they can be prepared and ready when the IBB process starts.

With many sub company differences to overcome, the committee is confident they will be giving the negotiating committee a strong starting point for these issues.

Seniority Committee Update

The Seniority Committee will meet again the week of the 15th to continue discussions on the combined seniority lists. One of the tasks assigned to the Seniority Committee has been to review the seniority lists of each work area and push for obvious corrections from local management. The hope is to limit the number of actual seniority discrepancies and protests by making sure the list is as accurate as possible. 

Watch the Debates Last Night?

I watch some but I missed this one. Mitt leave the bird alone.

Romney Promises To Fire Big Bird — Big Bird Fights Back, On Twitter

During the first Obama-Romney presidential debate, Mitt Romney promised to fire Big Bird. Romney, talking about the deficit early in the debate, said to moderator Jim Lehrer, “I’m sorry, Jim, I’m gonna stop the subsidy to PBS…. I like PBS, I love Big Bird — I actually like, you too — but I am not going to keep spending money on things [we have] to borrow money from China to pay for.”

Some enterprising individual quickly created a new Twitter account, @FiredBigBird, and as of this writing has 17,725 followers, all in the space of less than two hours. Source

 

BREAKING NEWS - BAIN CAPITAL HAS SHIPPED SESAME STREET TO CHINA... STORY DEVELOPING

 

 Organizing a Million Muppet March against Mitt...#MuppetsAgainstMitt

UAL Negotiating Committee Update

Assisted by the generosity of Local 455, its Principal Officer Steve Vairma, Business Agent John Hennelly and the Local committee; the negotiating committee met for over a two week period beginning on September 20^th and 21^st in Denver, Colorado. The committee spent the two days reviewing and prioritizing each of the articles and proposals suggested by the steering committee.

The committee reconvened September 26^th through the 28^th in Denver and spent the scheduled meeting time going through the three contracts of CO, UA and MCI to look for and identify any and all differences to each of the contracts in an effort to combine them into one.

The fourteen member committee was broken down into seven sub committees, with each committee was assigned a BA to assist with the review and help resolve questions the sub committees identified. Where differences were identified, recommendations were developed and reported to the entire committee. These recommendations will be reviewed when the committee meets in Chicago starting on October 10^th.

The protocol agreement is not yet been completed. A key to that process; the outstanding issues delaying the completion of the protocol agreement; is defining the number of open issues. Once that is done it is expected the protocol will be finalized quickly. The committee is also awaiting dates for official training regarding the NMB expedited bargaining procedures. Dates have been suggested to complete the training and the membership will be notified when the schedule is confirmed.

NASA Lands at United Airlines LAX

United is first U.S. airline to get Boeing 787

United Airlines has become the first North American customer to receive Boeing's new composite 787 Dreamliner, the two companies announced Monday.

"As the North American launch customer, we are delighted to be getting our first 787 Dreamliner," United President and CEO Jeff Smisek said in a news release. "As we continue to build the world's leading airline, we are excited for our customers and co-workers to experience this game-changing aircraft."

The 787, the first of 50 United has on order, is scheduled to arrive in Houston later this week for a one-month training and certification program, including non-commercial flights to each of United's domestic hubs. United plans to start 787 service with temporary domestic flights and then transition it late this year to international routes to Africa, Asia and Europe.

Read more: http://www.seattlepi.com/business/boeing/article/United-is-first-U-S-airline-to-get-Boeing-787-3889731.php#ixzz27PrLfSj1

American Airlines Mechanics Support Growing for Teamster Representation

The bankruptcy filing by American Airlines last November and other issues, including layoffs and wage and benefit cuts; all done to avert a bankruptcy and that have been piled on top of the previous cuts that occurred in 2003, have led the airlines mechanics to consider changing union affiliation to the Teamsters.

Chris Moore, an International Representative for the Teamsters, said his union is seeing "a lot of enthusiasm." "These American Airlines guys have issues that go back 10 years," Moore said. "They're tired of being beaten over the head. You have to bring order to the place, and work with the company to get things better for the guys. We're gathering momentum."

While AMFA is also attempting to conduct a drive, the International Brotherhood of Teamsters clearly is getting a very positive response. “The one issue that the mechanics see very clearly in this bankruptcy is the absolute need for the backing and support of a union like the Teamsters and expertise the Airline Division,” said Moore. “When you are attempting to protect your careers and your families in a fight with one of the biggest airlines in the world, you need a union with experience and resources like the Teamsters; not one that is in decline and has a history of giving up hard fought for gains like AMFA. You also need the support and resources of the TAMC (Teamsters Aviation Mechanics Coalition) that brings together mechanics from across the airline industry to fight for you on Capitol Hill,” Moore continued.

Commenting on their card drive Moore said, “We are very pleased with our progress to date and look forward to more meetings with the American mechanics, answering questions and explaining the benefits of being a part of the largest airline based union in America.”  For a related story, click on the following link:

http://www.newson6.com/story/19613658/american-airlines-mechanics-rally-to-break-from-twu

Negotiations Update

September 6, 2012

 

Parties Have Discussion with NMB

 

On Thursday August 30^th, the parties met with National Mediation Board member Linda Puchala and Senior Mediator Pat Sims. The purpose of the meeting was to discuss the process for moving forward with expedited negotiations. Among the items discussed were the protocol agreement and training for the negotiating committee.

Board Member Puchala emphasized the importance of tailoring the protocol agreement to fit the unique needs of the parties. Both Board member Puchala and Mediator Sims suggested the negotiating team receive training in the new process developed by the NMB. The new process is built on interest based bargaining and is designed to swiftly identify and resolve issues.  Finally Board Member Puchala committed the resources of the NMB to ensure the parties successfully conclude negotiations.

The parties are expected to meet in the coming weeks to finalize the protocol agreement. Training will occur in the same time frame. An update will be provided to the membership after the finalization of the protocol agreement in the same manner as previous notifications. 

In attendance for the Airline Division were attorney Ed Gleason, Airline Division Assistant Director Steven Nagrotsky and International Representatives Paul Alves and Bob Fisher. Attending on behalf of the company were Mike Bonds and Doug McKeen. 

 

Expedited Negotiations

 

Expedited Negotiations under the NMB were developed after years of criticism for the lengthy and often time’s very slow process of traditional negotiations. The prolonged procedure forced the NMB to create a new avenue to accelerate the bargaining process.  

One of the first steps in an expedited negotiation course of action is the Protocol Agreement. This is the agreement that will set ground rules and establish expectations and guide the expedited mediation process for our case. Items discussed can be meeting places and venues, as well as the frequency and daily schedules. The protocol agreement could also include the manner of discussing each issue, such as sub committees, or how communications are presented to the membership. The protocol agreement is simply an arrangement of the process that will be used to help in obtaining a speedy conclusion to reach a CBA. The parties each commit in advance to discuss and agree to the protocols and abide by them.

 

Meet the Negotiating Committee

 

The upcoming talks with the company to combine the two agreements in to an amalgamated CBA will be comprised of 13 members. The Joint Rank and File Negotiating Committee will be made up of the following members.

Bob Clever - IAH

Michael Nerren - IAH

Vinny Graziano - EWR

Steve Olsen - EWR

Paul Becerra - MCO

Mike Moats - CLE

Jay Koreny - IAD

Mitch Hunt - DEN

Mike Pecoraro - ORD

Mark DesAngeles- SFO

Joe Prisco - SFO

Anthony Ybarra - LAX

John Pangelian - GUMAssisting this committee will be Business Agents Rudy Gonzalez, Francis Diaz, Dave Elmore, Javier Lectora, Rich Petrovsky, Dave Saucedo, John Hennelly, George Graham, Angel Cantu, Dominic Fierro, Tommy Esposito, Ralph Salzano, and Charlie Alferio.
Overseeing the process for the Airline Division will be Clacy Griswold, Paul Alves, Bob Fisher, and Legal Council Ed Gleason.
 

New Structure for SFO 

Facilities Maintenance, also known as Trade Group 128 is providing some much needed solid support to the aircraft technicians in SFO. The project is to create and build a large motor driven working platform assembly that will facilitate the maintenance or replacement of flight deck windshields on Airbus A319 and A320 aircraft.
The SFO Facilities Maintenance Department commonly takes on large projects of this caliber and depends on cooperation from its different tradesmen to complete the task at hand. This particular build requires the talents of the in house engineer to design the platform, the weld shop to take the metal and fabricate it in to a safe working structure, and the hydraulic/mechanical shop to assemble the drive motors and drive shafts that will move this oversized metal workstation. This last shop also employees a certified crane operator who is instrumental in the construction of a stand of this size. When complete, the paint shop will do the prep and paint and the electricians will wire the whole thing up.
This is just one example of the many unsung maintenance personnel working at various stations and hubs throughout the new UAL organization. These support departments which also include some aircraft maintenance groups, are all too often undervalued and as a result under compensated for the significance they add to the airline. We are happy to recognize them and appreciate the work they do as well as the safety features they create for the aircraft maintenance technicians. 

Teamsters Aviation Mechanics Coalition Newsletter (TAMC)

The latest newsletter focuses on a number of major current events in the airline industry that are important to both union and nonunion employees, including:


A detailed report on the 18th Annual MRO Americas Conference in April including updates on outsourcing and other trends in the industry;

TAMC’s success in lobbying Congress for enactment of the new FAA reauthorization bill;

The current organizing drive among American Airline mechanics and related to become Teamsters;

A victory in March among Horizon Air mechanics to fend off a raid by AMFA;

Report on the Teamster Outsourcing Defect Report (TODR) and how it’s used by TAMC.

Another installment of “Better Know Your Government” to educate our members on the political process;

With so much important news and information in one newsletter, it is essential that this newsletter be distributed to all the aviation mechanics and related members represented by the Teamsters Union. Please take time to read this newsletter and pass it on to your coworkers.   Read it today!

Negotiations Update

Proposed path to resolution


The Steering Committee was invited to Chicago yesterday to hear a proposed path to expedite negotiations. The Company stated that they would like to reach a Joint Agreement by the end of this year and they offered a new method recently developed by the National Mediation Board to facilitate this process. The method developed by the NMB was a result of the Dunlop II report issued in April of 2010 and is based on the principals of interest based bargaining or IBB. IBB is generally seen as a quicker process than traditional or adversarial bargaining because rather than disputing particular words in any given Article, the parties first come to an agreement on how the Article should work in a practical application and then once agreement is reached on an issue, language is crafted to address the parties agreement.

Moving Forward

After the rank and file committee discussed the proposed schedule it was unanimously agreed that this approach would be acceptable to the Union. The company was notified of the decision and now the parties will jointly approach the NMB to begin the process. The first item that will need addressed is the protocol agreement. This agreement will establish a timeline as well as consequences in the event the parties are not able to reach an agreement by the agreed upon final date. The next step would be to get the negotiating committee to training for IBB which will be presented by the NMB. Once those steps are completed; which will happen quickly, bargaining in earnest will begin.

Questions about the process

Q. By agreeing to this process are we in traditional mediated talks?

A. No. This process is facilitated by the NMB but this is not mediation in the traditional sense. In other words, there will be no deadlock at the end and the Negotiating Committee could simply revert to traditional bargaining if an agreement is not reached.

Q. Won’t this potentially add to the length of time needed to reach an agreement if the process fails?

A. Possibly, but considering the average length of time from filing for mediation to getting a release by the NMB is now 22 months the Steering Committee felt it would be in the membership’s best interest try to reach an agreement quickly and saw the risks as minimal

Q. Does the membership concede any bargaining rights by using this process?

A. No. If this process is unsuccessful the parties begin traditional Section 6 bargaining under the RLA with full rights to the regular process.

Look for future updates that will discuss the protocol agreement, IBB training and progress made in the near future.

Negotiations Update

August 22, 2012

Negotiations Update

Negotiations will continue later this week in Chicago. UAL representatives have invited the entire steering committee for a brief meeting pertaining to upcoming discussions. On behalf of the membership, the Airline Division accepted the meeting and informed the committee.

The recent news regarding the Pilots “Agreement in Principal” as well as the announcement to expedite negotiations with the IAM, are telling signs that the company is indeed committed to a timely conclusion to agreement talks with all of its represented unions. This is the message that has been conveyed, and the company is showing real effort in the fulfilling this commitment.

The full committee will be meeting on Thursday, and it is expected that the presentation from the company will include Mike Bonds, Doug McKeen, Jim Keenan, Mark Mounsey and Joe Ferreria, as well as the company negotiating team. A report of what transpires at this meeting will be provided as quickly as possible after its conclusion.

Second Quarter Earnings Report

One of the departments within the Teamsters that provide us tremendous support is the very capable and talented Capital Strategies Department. Jamie Fleming is a Corporate and Financial Research Analyst with this department and offers this review on UAL as part of her quarterly report to the Airline Division.

United Airlines (reported July 26, 2012)

Price: $19.20

Reported ongoing earnings per share of $1.41, far behind analyst consensus estimates for earnings of $1.65 per share.

Several possible explanations for the miss include a one-time hit to labor costs for high medical expenses, an accounting adjustment for air traffic liability, and plain old lower revenue with higher costs.

UAL management had previously guided down second quarter PRASM (Passenger Revenue per Available Seat Mile), but perhaps some analysts did not suitably lower their expectations.

Investors beginning to question UAL management for repeatedly missing earnings expectations in different ways, especially with merger synergies starting to really kick in.

Ex-fuel costs rose 2.1%, a point lower than the industry, but cost pressures are building as the combined company tries to fix service problems and put labor contracts together. (which usually means raising them)

Expect higher cost increases through the second half of 2012 – 3-4% increases likely

Consolidated revenues increased 1.3% in the quarter.

Operating margin of 7.9% is lower than last year, and analysts expect UAL to be the only airline reporting LOWER year-over-year margins.

Analyst opinion:

Glenn Engel of Merrill Lynch: Rating is Neutral with price target $25

Michael Linenberg of Deutsche Bank: Rating is Buy with price target $31

Kevin Crissey of UBS: Rating is Buy with price target $36

Seniority Integration Committee

The Professional Association Attorneys at Law of Sugarman & Susskind were independently hired by Teamster Local 769 to further investigate the subject of the consent decree as related to the combined group of sCO and sUA mechanics.

In their final report, the law firm, through the attorney Howard S. Susskind, advanced and principally agreed to the two earlier opinions of Airline Division Attorney Ed Gleason, and the attorneys from Spivak Lipton LLP, who were retained to investigate this matter.

In his report, Susskind expressed the inherent difficulties in arguing against the position of the other attorney’s opinions as related to consent decree seniority and hire date placing. The following are inserts of the brief.

First of all the original consent decree signed by the now deceased Judge did not contain a fixed termination date. “Consent decrees remain in effect until they terminate of their own accord, are fully satisfied, or are subsequently modified or set aside through judicial action. None of those events has occurred. The consent decree by its express terms was to remain in effect for United and its successors as well as for the labor unions named therein and their successors.” The opinion of validity from the two prior law groups is consistent.

The second argument turns to the stage of the integration process and demands the question; is the integration done in a fair and equitable manner?

To this Susskind writes, “Reasonable people can and do disagree as to what is fair and equitable when it comes to seniority integration. In the event such intra-union disagreement is not resolved, it is my understanding that there is a provision for arbitration. It is important to bear in mind that a significant number of employees presently have their seniority for the purposes of layoff and recall established by the terms of the decree. United is bound by the decree. The decree remains in full force and effect. To the extent that an arbitrator is called upon to resolve an intra-union dispute over seniority, these are powerful and persuasive considerations affecting his award.”

The next question became the ability to modify the agreement through judicial means (arbitration does not have the authority to override federal courts).

Susskind responds, “The terms of the decree itself place jurisdiction over its enforcement in the United States District Court for the Northern District of Illinois, in Chicago. Any litigation to modify or terminate the decree must be filed there. The judge who entered the decree is no longer on the bench. Any judge hearing the case would have to familiarize himself with litigation that began in 1973, a factor that militates against an expedited ruling on a petition to modify or terminate the decree”.

He further explained the two avenues that could be used to argue the opening and exploration of the case.

The first would necessitate the involvement of all parties implicated in the decree within the entire company. This would suggest having every union as well as the company agree that the decree should be revisited. In some cases this could delay their own negotiation proceedings.

The second would be to argue with a high burden of proof that the original decree is no longer just or equitable in regards to all parties of the class and craft.

Susskind writes, “beyond the costs and delays that come with any federal litigation, this standard amounts to proving that the consent decree’s layoff and recall provision is unjust and inequitable – a provision that has been embodied in a collective bargaining agreements for more than a decade, one that is supported by IBT locals and members as well at this time.”

To summarize, Susskind’s report ended with; “the consent decree remains in effect. It may be modified or terminated, but only through litigation in the Northern District of Illinois. That litigation would be prolonged, expensive, and – give the high standard that must be met to modify a decree – unlikely to succeed based upon the information provided. An arbitrator may not modify or rescind the decree and would find it persuasive (and possibly even binding) in issuing his own ruling. To the extent that the decree’s own terms allow modification through collective bargaining, that provision of the decree does not apply at this time to an intra-union effort to integrate seniority.”

The decision to investigate this further has been the resolution of some of the Locals. The Airline Division would like to express the appreciation of these Locals for so diligently looking after their member’s best interest. It is recognized as the Locals responsibility to regard the absolute safe guard of each of their members. It is to the benefit of all of us as UAL Teamsters that all arguments on this subject are heard, and that each Local and member has the ability to voice their individual concerns.

United’s First Boeing 787 Takes Flight

 United’s 787 touches down in Everett. Image by Malcolm Muir.

Yesterday, United Airline’s first Boeing 787 Dreamliner took off from Paine Field on its first test flight. Luckily Malcolm Muir and Boeing were there to catch some great photos.

The three hour flight took the 787 over Washington state and northern Oregon before heading back to Paine Field. During the flight, Boeing crew members put the 787′s systems through multiple tests.
Seattle PI.

Negotiations Update

The Steering Committee concluded the first part of the amalgamation process last week by creating a template to be used as an opener to present to the company. Proposals were submitted through a process that began in late April and ran through June. Members were encouraged to study the agreement and submit suggestions to strengthen our future position. These suggestions were then vetted through a three week process by the members of the steering committee. Lengthy discussions were held regarding each of the member’s submissions, and in some cases the proposals were voted down, and in others they were approved. Member submissions also sparked several discussions by the committee on various applications of the agreement that are either unclear or believed weak by the Committee. The result of these spontaneous discussions should be improved language and clarification for the membership regarding many articles of the agreement.

It should be noted, there were at times very contentious topics discussed during these meetings as a result of three groups who have become very accustomed to habit suddenly being forced to change. Through it all, each member of the committee acted responsibly, respectful, and viewed each other’s concerns with interest and open consideration. This level of professionalism was very appreciated by the leadership, and has been beneficial to the membership.

The next step in the process is to request and submit available dates to meet with the company for face to face talks regarding these new member and Steering Committee proposals. These joint talks will be attended by the Negotiating Committee whose members are still being decided by each of the represented Locals. The Steering Committee, however, still has a major function and will meet again periodically to confer with the Negotiating Committee in an effort to be sure as many stations and work areas as possible are represented in this new agreement.

During the Steering Committee process, we spent time meeting in three different locations; Los Angeles, Houston, and Denver. We would all like to thank the committee members and Locals from each of the host cities for making the long hours and time away from our families more bearable.

Meet the Steering Committee
These following members from various Locals formed the Steering Committee.

Houston Local 19: Bob Clever, Jack Harran, Craig Larson, William Lewis, Michael Nerren, Victor Ruiz,
Phoenix Local 104: Jerome Sanchez
Newark Local 210: Vinny Graziano, Steve Olson
New York Local 210: Larry Calhoun (JFK), Allen Cosides (LGA)
Washington DC Local 210: Jay Koreny
Orlando Local 769: Paul Becerra, Frank Musko, Ryan Rostek
Chicago Local 781: Scott Baroni, Mike Pecoraro, Paul Casper
Denver Local 455: Mitch Hunt, Scott Brown, Don Ramsey, Jim Prout, Ken Meidinger
Cleveland Local 964: Mike Moats
Guam Local 986: John Pangelinan
Hawaii Local 986: Roger Apana, Ken (Moki) Kim,
Seattle Local 986: Jock Creach, Roger Robertson, Phillip Stewart
Portland Local 986: Tom Simmons, Robert Pennell
Los Angeles Local 986: Robert Bishop, Dion Cornelious, Anthony Ybarra
San Francisco Local 856/986: Fred Wood, Dan Johnston, Joe Prisco, John Laurin, Donald Stevens, Leigh Skilling, Greg Sullivan, Mark DeAngles


Assisting the Committee are Business Agents Angel Cantu, Dominic Fierro, John Hennelly, Tommy Esposito, George Graham, Francis Diaz, Justin Muraki, Javier Lectora, David Saucedo, Rich Petrovsky, Charlie Alferio, and Dave Elmore.
Overseeing the process are Airline Division Representatives Clacy Griswold, Paul Alves, and Bob Fisher.

Pilots at United Reach an Agreement in Principal

After more than two years of negotiating with the company for a joint collective bargaining agreement, the combined group of United Pilots represented by ALPA has reached an agreement-in-principle. The agreement talks with the roughly 7000 UA and 5000 CO Pilots have been moving forward with the assistance of the National Mediation Board.

Terms were not disclosed with the announcement, but according to various news sources, ALPA leaders said the agreement would help make economic amends to pilots who had made concessions during difficult years for the airline industry. The pact would provide gains in pay, work rules, job protection and benefits.

Captain Jay Pierce, chairman of the ALPA unit for Continental pilots said, "After many years of enduring the hardships of concessionary and bankruptcy-era contracts, we are pleased to have finally reached an agreement that will allow our pilots and their families to see gains in compensation, work rules, job protections, and retirement and benefits.”

Captain Jay Heppner, chairman of the United Master Executive Council added, "After working under a bankruptcy contract for nearly 10 years, the substantial contributions of the pilots in helping United Airlines survive its darkest economic days and make the United/Continental merger possible will, at last, be respected and rewarded."

The agreement in principal was achieved on most major economic issues. While some details of an agreement still remain open, the pilots are confident a final AIP can be worked out in the coming days, and then submitted to the Pilot members for voting.

While we are very pleased with this announcement, we should point out it will have no significant impact as to the status of the mechanic and related negotiations.