Thursday, December 1, 2011

AMERICAN AIRLINES -- MORE ABOUT UNIONS AND CH 11

I apologize for the structure of the post below, with no segmentation, but the system refuses to do it my way. To my post yesterday re AMR's chapter 11 filing relating my experiences over many years flying with AA, an AA pilot wrote a thoughtful comment that caused me to think a bit more about the precursors to conditions of their bankruptcy. Frankly, I have what is perhaps too much experience with trade unions and their excesses, but know less about others such as the airlines. After learning more about the negotiations of AA with their unions, I now think it's justifiable to post the comments below. I've seen too many industries destroyed by union excesses coupled with management incompetence in caving to excess demands. Start with coal (dead for many years), steel, textiles, shoes, electronics manufacturing, and more.  The Detroit 3 (once the big 3) deserves special mention. As their costs rose to $72/hour (fully loaded) and costs in the southern industry were 1/3 rd of that, Detroit lost 50% market share and ultimately required a bailout by Obama to protect the UAW voter base. Didn't save the industry as claimed. The industry was functioning in the south and even in the North with Ford.
To AA pilot: With all due respect I feel less apologetic for telling my story of AA and relaying the comment about pilots' and the delayed flights. After learning more about the Chapter 11 filing of AMR and the negotiations with unions that broke down prior to the filing, it seems that the pilots' union gave AMR a deal the could (and had to) refuse. If reports are true, and must be assumed to be, a demand of 10% increase upfront and 7%/year continuing is a non-starter in the market today, and in the economic conditions of the industry. To me, one who has observed unions for many years, this was very misguided and it ignored reality. Surely, the pilot union leadership should have more information from which to make their demands than we laymen have, but this smacks of the same misguided excesses that caused the auto industry to move south to escape the UAW. It must be expected that the airline industry is about to rationalize with one of the bigs going into Chapter 7 --- AMR? That would be a sad event. Sorry, but this is reality. 01 December, 2011 

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