Mechanics' Dispatch

Technicians Update

May 2, 2020

Brothers and Sisters,

I have once again asked the Airline Divisions Senior Transportation Analyst, Kyle Schoembs, to review the first quarter earnings report posted by United Airlines on April 30th, and the first quarter 2020 earnings call which took place on May 1st. The following is what he concluded:

On April 30th, United Airlines (UAL) filed a press release announcing its first quarter financial results. In that press release, UAL showed a net loss of $1.7 billion after taxes, on a 16.8% drop in revenues. On an adjusted basis, which strips out special onetime charges, UAL posted a net loss of $639 million.

As of April 29th, UAL had $9.6 billion in liquid assets, including $2.0 billion under its undrawn revolving credit facility. The company has aggressively sought to raise additional liquidity through new loan facilities, new aircraft financing and a $1.1 billion equity offering. Excluding CARES Act funds, UAL has raised $4.0 billion since early March. Going forward, UAL CFO Gerry Laderman noted in the earning call that the company has $10 billion in collateral that could be used to secure additional liquidity if needed.

UAL will receive $5.0 billion from the U.S. Treasury Department though the Payroll Support Program under the CARES Act. Of the CARES Act funds, $3.5 billion will be grants and the remaining $1.5 billion will be in the form of a 10-year loan. The two major stipulations to CARES Act funding are that UAL is required to use the money to protect the salaries and benefits of employees through September 30, 2020, and UAL will issue warrants to the federal government to purchase 4.6 million shares of UAL common stock.

On April 21st, UAL received its first $2.5 billion in CARES Act funds. The company also expects to have access to an additional $4.5 billion in loans from the CARES Act loan program through September 30, 2020 with additional warrants tied to the amount of money UAL borrows.

The company noted they expect a second quarter average cash burn of $40 to $45 million per day. To get there, UAL has cut capital expenditures in half for 2020, including stopping 200 real estate projects and cutting tech projects. Given the cuts in expenditures, and additional CARES Act funds, UAL projects end the second quarter with a similar level of liquidity as today.

UAL does expect 16 737-MAX this year and 24 next year (assuming ungrounded), eight more 787-9 this year and eight 787-10 next year. Because production already started, it is "financially impractical" to halt or delay these orders. Looking forward, UAL is in discussions with Boeing on the timing post-2021 737MAX deliveries, but does not anticipate taking any of those aircraft until they are needed. Additionally, no decisions have been made regarding the retirement of aircrafts. All stored aircrafts are currently considered to be ‘temporarily parked’, with decisions expected to be made in the future.

We will continue to monitor the situation and keep you apprised of changes as they occur.

In Solidarity,

Vincent Graziano

Airline Division Representative

International Brotherhood of Teamsters

Mechanics' Dispatch

Brothers and Sisters,

In these trying times I hope everyone is staying safe and remaining healthy.  While we work through the stresses the pandemic is causing for our families and on the job, I wanted to take the time to write to address an issue that has arisen regarding the status of the Continental Airlines Retirement Plan (CARP).  You may have been alerted to the recent distribution of several documents related to the funding and status of CARP  contained in the  Annual Funding Notice (AFN).  United is required by law to issue this document and related materials each year to provide insight into the performance of your defined benefit retirement plan.  The document itself contains a number of measures of the solvency and performance of CARP, but they can be more confusing than helpful due to the actuarial language and complexity of assumptions, accounting rules, and calculations.   I thought it best to have the funding notice reviewed and analyzed by our Actuary and Economist trying to explain how best to understand the funding notice and how to evaluate the best option available to you during this time.

I know many of you have concerns about the plans solvency and the company’s recent financial instability. I think the information below will ease your mind and give you much needed information in order to make a pragmatic decision that’s best for you and your family.

Below is a brief summary of how the funding levels of the plan stand, along with an explanation of how to understand the Annual Funding Notice.


Summary of Annual Funding Notice regarding the status of the Continental Airlines Retirement Plan (CARP)

 

We understand you may be concerned that the latest information from United Airlines about the Continental Airlines Retirement Plan, the Annual Funding Notice (AFN), can be misinterpreted. 

We also believe that CARP is an important retirement benefit and we worked hard to expand coverage of the CARP to all United Mechanics with the last contract.  CARP is particularly appealing to its participants because it provides an option to take the benefit as a lump sum on retirement – and there is a suggestion that this lump sum option will go away over time as CARP funding levels deteriorate.  While this may be an issue in the long term, especially with the economic headwinds for travel imposed due the Covid-19 pandemic, in the near term you should not be concerned of losing the ability to take a lump sum   

Viability of Lump Sum Option Payout
The AFN contains a series of figures concerning the status of funding and viability of the plan. The AFN indicates that based solely on the current funding levels of CARP, the lump sum payout option will be secure in 2020 and 2021, and in fact be greater than the payouts available in 2019.  The payouts will be greater because “adjusted interest rates” assumed in the plan going forward will increase funding levels above 89%.  However, beyond 2021 the lump sum option is not only dependent on the health of the CARP plan but also the viability of United Airlines.  The bigger risk to the health of CARP and the lump sum payout option is not the plan itself but the continued health of United Airlines during this tumultuous time and its ability to fund the ongoing benefit accruals.  For now, United appears to have secured liquidity to ensure continuing operations through at least 2020 and thanks to some foresight recently made more than the Federally mandated minimum contributions giving themselves some flexibility.  

 

For additional details regarding the status of CARP as provided in the United Annual Funding Notice, please read the information provided below, which is a more technical review of the AFN and CARP funding.    

 

The CARP Annual Financial Notice Explained

What is the AFN and why are we receiving it?  The AFN is a requirement of ERISA and is to be sent to all participants annually.  It is written using a template designed by the Department of Labor.  


What information does the AFN contain?  It contains information about the funding levels of CARP at three successive plan anniversaries, December 28, 2016, 2017 and 2018 and it provides information on two sets of valuation assumptions.  The most recent of these shows the fund was 137.1% funded on December 28, 2018 using the adjusted interest rates and 100.9% funded using unadjusted interest rates.  The comparable figures for December 28, 2019 will not available until the actuarial valuation is completed.

The AFN also contains information in a paragraph entitled Year-End Assets and Liabilities.  This shows assets and liabilities measured at market values and, according to the DOL, provides a clearer picture of a plan’s funded status.  The funding level on this measure is 89%.  The comparable figures for the prior two years were 87% (2018) and 90% (2017), although had the company added the 2019 contribution of $635,000,000 as a “receivable” part of the 2018 assets the funded ratio would have exceeded 100%. 

It also contains information on how the plan’s assets are invested and the PBGC guaranty program.  

 

Confused about which funding to be concerned about?  The answer depends on why you are interested in the funding measure. If the reason is a concern about the availability of the lump sum then the funding measure using the adjusted interest rates is what you should look at.   The December 28, 2019 funding measure will certainly be greater than 89% because “adjusted interest rates” are used and so lump sums will be payable in 2020 and also in 2021.  (The CARES Act provides relief from the benefit restriction rules by providing that a plan sponsor may elect to treat the plan’s adjusted funding target attainment percentage (AFTAP) for plan years that include calendar year 2020, as equal to the AFTAP for the last plan year ending before January 1, 2020. This relief can be used by United to keep paying full lump sums through 12/27/2021. The side letter on funding CARP means United can NOT try to restrict lump sums by failing to make this election.)  This measure is also appropriate for a long term planned funding of CARP by United – the targeted log-term rate of return is below 5% a number that pension investment experts believe is achievable. 

On the other hand, if you are concerned that United might be forced in chapter 11 (again) then the market based funding measure is of concern.  You want benefits to be covered by an insurer who will honor the lump sum option rather than for benefits to be picked up by PBGC who will not.  This measure will vary day-by-day.  The volatility on the asset side is well-known through daily news coverage of investment markets.  There is also volatility on the liability side – this is the cost of buying annuities to place the pension payments with an insurance company.  They are extremely risk-averse, investing in fixed-income investments, avoiding the stock market and, at the end of 2019, had an investment return expectation of 3%.

 
What if there is a rush to retire and lump sums are paid to hundreds of participants? The funding levels of CARP will decline because lump sums are calculated using interest rates closer to the market based than the “adjusted interest rates” and on market rates the plan is less than 100% funded.  However this decline will be small.  If 10% of the actives retired and took lump sums the funding rate would fall by about 1%.

Must United Airlines make a contribution to the plan for 2019 or 2020?  Under the ERISA funding rules United does not need to make a contribution for the plan year ending December 27, 2019.  It can make a contribution as late as September 12, 2020 and count it towards the plan year ending December 27, 2019, however IBT thinks with the Covid-19 pandemic a contribution is unlikely.  We will not know if there will be an ERISA minimum required contribution for the plan year ending December 27, 2020 until the valuation at December 28, 2019 is completed.  


In Solidarity,

 

Vincent Graziano

Airline Maintenance Coordinator

Airline Division

International Brotherhood of Teamsters

Mechanics' Dispatch

Special Update

April 22, 2020

Brothers and Sisters,

Yesterday, a federal court issued a judgment in the Beier vs. IBT litigation many of you may have heard about.  We can say that all but one of the plaintiffs’ claims were dismissed by the judge. A single claim survived because at this phase the judge cannot make decisions based on evidence, and must assume that everything the plaintiffs claim is true, although this is certainly not the case. 

The IBT has every confidence that when the Court is able to review the facts, the IBT will prevail, since we did everything we could in negotiations to secure your participation in the CARP DB plan as quickly as possible.  The IBT is proud of its role in ensuring United mechanics are the only legacy carrier group to have a DB pension plan. 

We will keep you posted of further developments. 

In solidarity,

Vinny Graziano

IBT National Coordinator

Airline Division 

Mechanics' Dispatch

Technicians Update

April 22, 2020

Brothers and Sisters,

I've asked for a report from the Airline Division’s Senior Transportation Analyst, Kyle Schoembs, on the financial situation at United Airlines given the dire outlook communicated by the company recently. The following is what he has concluded;

On April 20th, United Airlines (UAL) filed preliminary first quarter results with the SEC that showed a pre-tax net loss of $2.1 billion. On an adjusted basis, which strips out special onetime charges, UAL reports a loss of $1.0 billion. Total revenue for the quarter was $8.0 billion, a 17% decrease from first quarter 2019.

As of April 16th, UAL had $6.3 billion in cash, cash equivalents, short-term investments and undrawn amounts, including $2 billion under its undrawn revolving credit facility. 

Going forward, UAL will receive $5.0 billion in loans and grants from the CARES Act. Of the $5.0 billon, roughly $3.5 billion will be direct grants, and the remaining $1.5 billion will be a ten-year low interest loans, with interest rates of 1.0% in years one through five and 2.0% in years six through ten. Additionally, under the CARES Act, UAL expects to have the ability through September 30, 2020 to borrow another $4.5 billion from the U.S. Treasury Department for a term of up to five years.

In April, UAL has cut approximately 80% of its capacity and currently expects to cut 90% of its capacity for May and June. UAL plans to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand.

It is expected that UAL will submit a more detailed SEC filing of the first quarter results on April 28th. After we review that information, we will update the membership to the contents of that document.

We will continue to monitor the situation and keep you apprised of changes as they occur.

In Solidarity,

Vincent Graziano

Airline Division Representative

Intl., Brotherhood of Teamsters

TAMC Newsletter -- COVID-19 Edition

Click here to read the TAMC Newsletter — COViD-19 Edition.

Aviation Labor Letter to U.S. Treasury Secretary on Payroll Grants

Please see the letter linked here from aviation unions, including the Teamsters, to U.S. Treasury Secretary Mnunchin inquiring about the timeline of payroll grants to aviation workers.

Airline Division Week in Review -- April 10

We are surrounded by the uncertainties of current national and world events due to the COVID virus.

Because of the fast pace of changes currently in our industry; in many cases hour by hour, the normal publishing of The Week In Review has been placed on hold. We encourage you to remain in close contact with your individual Local, Shop Stewards and Committee representatives as we all navigate this crisis.

We also want to recognize so many of our fellow brothers and sisters who are volunteering across the nation.

As we celebrate Passover, Good Friday and Easter, we encourage each of you to remain vigilant, take the care to be safe and follow best practices and take care of your families.

On behalf of each of us in the Airline Division, our very best wishes for a Happy Easter and Happy Passover

Joint Union Letter to the US Treasury Secretary on the CARES Act

Please click here to read the Joint Union Letter to the US Treasury Secretary on the CARES Act.

March Business Agents' Report

COVID-19 Update

The last few months have been historic in terms of the impact the COVID-19 Pandemic has had on all of our lives. Things have changed dramatically for all of us and we are all now living with a tremendous amount of fear and anxiety. We all have seen the modeling which predicts that things will get much worse before they get better. Therefore, it is extremely important that everyone take seriously the CDC guidelines being circulated in order to help slow the spread of this virus.

First and foremost, this means that if you are sick, you need to stay home. Your health and that of your family needs to be the primary focus and not superficial collateral issues like the attendance policy, etc. Additionally, if you are compromised in any way in terms of potential exposure to COVID-19 it is essential that you take any time off necessary to mitigate the risk. If you have any issues arranging for time off or returning from time off, please reach out to your local Union Representative.

The IBT Safety and Health Department has published Fact Sheet for Airline Workers that is a must read for all. You can access it by going to the TeamstersSFO website and clicking on Coronavirus Updates. This page also has a direct link to the IBT Safety and Health COVID-19 Resource page as well as various links to web pages related to the CDC best practices concerning personal hygiene, hand washing, respiratory etiquette and social distancing. 

The TeamstersSFO Committee remains engaged with the Company at various levels in order to determine the requirements under the law that UAL has in terms of notification to employees regarding any potential COVID-19 exposure in the workplace. We understand that this a major concern for our folks and we are working diligently to address those concerns. However, please be careful not to spread rumors and innuendo. That does nothing but increase stress on yourselves and your coworkers. Please remember that it is ultimately the CDC that is calling the shots on these response-related issues and we have to trust that these professionals know what they are doing.

One last word about stress. If you find yourself having a hard time dealing with anxiety, stress, depression or other related issues, please do not hesitate to reach out to your local TMAP representative for a confidential conversation. Steve Loone (MM/Airframe) can be reached at Cell: (650) 745-5864 Work: 650-874-2619 and Steve Crummey (Back Shops/Jet Shop) can be reached at Cell: (650) 745-5867 Work: 650-874-3006

Going forward, we will be sure to send out any new information we receive as we get it so be sure to get signed up on the TeamstersSFO website for email updates.

John Johnson Appointed TeamstersSFO Grievance Secretary

Longtime Shop Steward John Johnson has been appointed interim Grievance Secretary to replace Mark Gabriel, who retired as of April 1st. Anyone who has worked with John knows that has a reputation for leadership, tenacity and attention to detail. We are grateful that he accepted this new challenge and we are certain that his superb skill set will serve the membership well. We look forward to working with him.

We would also like to take this opportunity to pay tribute to the retiring Grievance Secretary Mark Gabriel for his many years of service to the membership. Our first memories of working with Mark date back to the Oakland days in the early 90's where Mark first developed his reputation as someone who had expert knowledge of the contract and who could always be counted to serve it up straight with no BS. Mark also never hesitated when it was time to take on the company and over the years many of our members have benefitted from the resolve and diligence he showed when working an issue or grievance.

We are privileged to have had the opportunity to work with him and we hope that he enjoys a long and joyful retirement.

Congratulations Mark! You earned it, Brother!

California Teamsters Hispanic Caucus Scholarship

The window is now open to apply for the 2020 California Teamsters Hispanic Caucus Scholarship. This scholarship is open to deserving High School Seniors graduating this year who are a daughter/son of an active Teamster whose dues are current with his/her Local Union and are attending or have been accepted by an accredited University, College, or Trade School. For more information or to apply please go to the TeamstersSFO website and click on the Scholarship tab under the Member Resources header. The application deadline is Friday, June 5th, 2020.

New IBT Airline Division Grievance Tracking System is Live

The IBT Airline Division Grievance Tracking System is an automated, internet-based and complete solution for storing, printing, processing and tracking of all Airline Division grievances as well as providing automatic e-mail notifications and comprehensive but secure search capability of the entire grievance database. It is designed to enable the Union to capture every piece of information about each grievance, so that all records will be complete and organized and so that anyone else involved with the grievance process will need no other source of information. The old paper grievances will now no longer be used. Please see your Shop Steward for more information.

This Month's Quote

“We will come out of this storm. In the coming days, we have to stay calm and confident. And for sure, we will overcome this moment of despair. How long this will last cannot be ascertained. But the one thing that we can be sure of is that we will not be the same anymore. Hopefully, we would have changed for the better. This is the way of life. This is how life teaches us its lessons." - Avijeet Das

Please Stay Safe Folks!

            Mark DesAngles                    Javier Lectora
Business Agent                      Business Agent
Local 986                                 Local 856

Click here to view a printable version of this report.

Letter from Airline Division to U.S. Treasury Secretary

I am writing to you on behalf of the more than 85,000 Teamsters working in aviation. Earlier this week, the President noted in a tweet the efforts of Teamster-represented Atlas pilots, who are flying tons of medical supplies to the places that most need them. Last week, America’s aviation workers won a huge victory in the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) that should be the model for how we deal with the entire economic crisis caused by COVID-19. Under the provisions that the Teamsters and other unions fought to have included, the federal government will pay the wages, salaries, and benefits of more than two million airline and airport workers, most of whom were facing layoffs or furloughs due to the near total collapse of air travel in this country.

Please click here to read the full letter from the Airline Division to the U.S. Treasury Secretary.

Treasury Guidance on Payroll Support to Aid Airline Industry Employees, And on Loans to the Airline Industry

Please click here to see important information regarding the Coronavirus Aid, Relief and Economic Security Act and the Airline Industry.

A Message from Teamsters Airline Division Director Capt. David Bourne:

Congressional leadership has produced a historic $2 trillion stimulus bill that provides significant relief to aviation workers. The 96 Senators who were present for the vote supported the legislation unanimously; it was voted into law by the House of Representatives earlier today and is expected to be signed into law by the President. 

I’d like to extend my deepest thanks to all of those who have contacted members of Congress regarding this legislation. Your rapid mobilization this week to communicate our needs to elected officials in Washington made the difference for every pilot, mechanic, attendant and every other worker in the airline industry. Thanks to you, we live to fight another day. 

The stimulus bill contains $61 billion for the airline industry, including $32 billion in grants and $29 billion of loans, plus $10 billion in grants for airports. Once it becomes law, the legislation will help maintain our aviation infrastructure and protect our jobs for the next six months as we recover from the COVID-19 pandemic. Rather than passing a carte-blanche handout to executives and shareholders, Congress placed a number of pro-worker conditions on the extension of federal funds, including the following guarantees: 

• $32 billion in aviation grants are statutorily required to be used on workers. Any airline receiving grants from the federal government must use these funds exclusively on worker wages and benefits. This will allow carriers and other companies to their payroll in the immediate future and prevent any new furloughs or layoffs. 

• Any airline or aviation company receiving grant funding cannot conduct involuntary furloughs or reduce pay rates and benefits from the time they receive the grant through September 30, 2020. 

• Recipients cannot engage in stock buybacks or pay dividends until September 30, 2021. 

• The federal government cannot condition any grants or loans on the renegotiation of collective bargaining agreements in order to reduce employee pay or benefits. For grants, this protection is in effect through September 30, 2020. For loans, this protection is in effect until one year after the loan is paid. 

• Grant recipients cannot increase the pay or severance of high-paid executives ($425,000+) for a two-year period beginning on March 24, 2020. This does not apply to any worker in a bargaining unit. 

• Within 5 days of passage, the government will create a process by which carriers can apply for grants and must begin doling out money within ten days. 

• Companies may defer contributions to single-employer pension plans until January 1, 2021 but are still responsible for making any and all contributions that have already been negotiated. Employers must also pay interest on deferred contributions. 

Thank you again for your hard work, perseverance, and solidarity during what is an extremely trying and uncertain time. In spite of the challenges being thrown our way, we are rising above and demonstrating our collective power. This crisis is far from over, but if we continue to advocate tirelessly both for ourselves and for one another, we shall persevere. 

With Highest Regards, 

Capt. David Bourne 
Director, Teamsters Airline Division 

James R. Hoffa Memorial Scholarship Fund

Due to the National Emergency, the deadline for applying for the James R. Hoffa Memorial Scholarship Program this year has been extended to April 14, 2020.

The sons, daughters and financial dependents of Teamster members in the US and Canada (including GCC, BLET and BMWED) who are seniors in high school are eligible to apply. The Fund awards academic scholarships from $1,000 to $10,000 and training program/vocational scholarships from $500 to $2,000. 

Please review all the application requirements: www.JRHMSF.org

Mechanics Dispatch - Special Update -- March 25, 2020

SPECIAL UPDATE
March 25th, 2020

COVID-19 Fatality in Newark 

Brothers and Sisters, 

It was confirmed that Brother Carlos Consuegra from the IAM passed away yesterday from complications of COVID-19. Our deepest sympathies go out to his family and friends. 

My recommendations to those that worked near him, or with anyone else that has tested positive, are as follows. If you had direct contact within the last 14 days, please self-quarantine. If you are feeling ill, please self-quarantine. If you have an underlying condition such as diabetes, asthma, or heart disease please self-quarantine.  

Now is not the time to be a hero and report to work sick. Infecting others and potentially spreading this disease will kill our more compromised members. 

If you have no sick time left, we'll try to help you out when this situation is contained. There are also services that can help through EAP. To be clear however, it is better to take off a few days with no pay than to die or potentially kill others.

Sincerely, 

Vincent Graziano
Airline Division Representative
International Brotherhood of Teamsters

Airline Division Special Update

Friday, March 20, 2020

To All Of My Fellow Teamster Members In The Airline Industry:

Our country is currently gripped by a pandemic the likes of which nobody has ever seen in our lifetimes, causing our entire society to be at a standstill. The crisis caused by the Coronavirus (COVID – 19) is one that promises to have a pronounced impact throughout all sectors of the economy, but particularly in the field of aviation. During this time most if not all of us in the industry are worried about what the future holds, so with that in mind I’d like to provide you with some information regarding what our union has been doing to ensure that our interests are protected in any legislation that is being or has been drafted to address the impact of COVID – 19: 

The Federal government’s response is extremely fluid at this point and some of it is moving very quickly, but we are fully engaged with decision-makers and coalition allies to make sure the needs of Teamster families are addressed. We have both proactively reached out to and been contacted by Congressional leadership in the Senate and the committees tasked with writing the next iteration of assistance packages. Our union has offered initial suggestions with the guidance of the Airline Division, the guidance of the other IBT Division Directors and the IBT Safety and Health Department.

At this point two pieces of legislation have been passed by Congress to address the pandemic. The first is an emergency supplemental funding bill which the President signed on March 2. The second is a more comprehensive economic stimulus and support package called The Families First Coronavirus Response Act - H.R. 6201. The emergency supplemental bill included $8.3 billion in total funding, mostly geared towards addressing immediate public health concerns and loans to affected small businesses. The Families First Act strengthens unemployment insurance with $1 billion in emergency grants to states for processing and paying unemployment insurance (UI) benefits. It also requires states to take steps to temporarily ease eligibility requirements that might be limiting access to UI during the COVID-19 outbreak. A third and more comprehensive support package is already in the works and there will also be legislation to provide direct assistance to hard hit industries and financial markets. 

We have been told that the White House is working with Treasury Secretary Mnuchin on an $850 billion stimulus that will include significant support for the airline industry at a minimum, but likely other hard-hit industries as well. Our understanding is that Senate Minority Leader Chuck Schumer (D – NY) is already in negotiations on this with the White House, and our union’s legislative staff has conveyed to Senator Schumer’s office where the airline industry and other Teamster-represented industries require relief. We are pushing for assistance whether it be in this package or another anticipated bill. In all of our legislative efforts the Teamsters have conveyed to lawmakers and the White House that it is imperative for any and all economic relief to address the needs of workers before addressing the needs of executives and shareholders. 

As of this writing - Friday, March 20, 2o20 - there have been no lay-offs of our membership in the airline industry. In the Airline Division’s conversations with our employers, they have told us that they have also been in contact with lawmakers, and they are optimistic that the legislation passed by congress will address the most significant impacts of COVID – 19. They have also expressed their belief that any revenue shortfalls our companies experience will be much more short-lived compared to the economic downturns that the airline industry has experienced in the recent past.

The Federal Government’s response is constantly evolving and moving quickly, but we are doing everything we can to convey our union’s needs to elected officials. That being said, members of Congress need to hear from you; please take one minute to send them a message at this link so they know that lawmakers need to pass an airline relief package that puts people first.

I want everyone to know that were doing everything we can to shape these relief bills to make sure that they help Teamster families. We’ve been through challenging times in the past, and I’m confident that with the continued strength and unity of Teamster Power, we will weather this storm as well.


In Solidarity,


Capt. David Bourne
Director, Teamsters Airline Division

UAL Mechanics Dispatch SPECIAL - March 20, 2020

Special Update
March 20, 2020

Dear United Airlines Brothers and Sisters,

Recently an email from a mechanic in Newark was disseminated system wide that gave an inaccurate overall picture of what has been transpiring. This situation is changing rapidly. I want to be clear; the most accurate and concise updates will come in the form of the Mechanics Dispatch to all members. 

While the airline industry bailout is starting to take shape, no one can predict what the final package will entail. With the current cash burn each airline is experiencing right now, most of them will need assistance just to survive. As in each legislative matter affecting airline employees, the IBT is continuing to lobby on your behalf for this relief. A joint Labor/Management letter was sent to Secretary of Treasury Steven Mnuchin, House of Representatives Speaker Pelosi, Minority Leader McCarthy, Senate Majority Leader McConnell and Senate Minority Leader Schumer outlining the dire need of such action.

The company approached all the Unions on the property about what they believed was necessary for survival. One of the key requests was a 50% reduction in payroll liabilities. To be clear, that does not mean a 50% reduction in employees pay. Other means of reducing payroll include, cutting out all overtime, not backfilling current open positions, accelerating retirements and offering flexible leaves. We requested economic data from the company before so there is a clear understanding of what the company actually needs. Please remember that it has been made clear that we are not willing to entertain such a request while federal bailouts loom. No change to the economic terms and conditions of the CBA can be made without a membership vote. Our position with the company is that any relief agreed upon would only be temporary in nature and that relief would be returned to the members in full. In other words, we are not willing to agree to any permanent changes to the agreement and 50% is an unreasonable request and will not be entertained.

In the worst case scenario bankruptcy does not mean the CARP pension plan automatically disappears. There are current funding level requirements to maintain the “Lump Sum” option. What would possibly be in jeopardy is the continued infusion of money by the company to maintain the plan above those levels. If the funding levels dip below the requirements that would trigger a change in our benefit options and the overall health of the plan. At this moment however the company is working on surviving without entering bankruptcy. As stated above that could change and you need to be aware of the possibility.

This situation is extremely fluid; changing daily and sometimes, hourly. The Administration has been discussing suspending domestic air travel for a period of time. That hasn't happened yet, but it is a possibility. If it does happen it will make a dire situation worse and will increase pressure for a bailout. 

Updates will continue through the Dispatch as this situation unfolds. Don't fall victim to rumors or speculation. Reach out to your respective Business Agents for updates they will be able to help you.

In conclusion the best thing we can do is provide the same great service as we do every day for United Airlines. This is critical; take care of each other. If you're ill don't come to work. If your coworker is sick, call and check on them. Through generations we are defined by how well we face adversity such as this. All of us will come out of this much stronger and closer than ever before and we will do it together. 

In Unity,

Vincent Graziano
Local 210, Business Agent
IBT National Coordinator, Airline Division

Mechanics Dispatch -- March 19, 2020

Special Update

March 19, 2020

Aflac

During these difficult times the IBT and Aflac have been looking at ways to help our members. Aflac has agreed not to lapse coverage for any participant in the Teamster Supplemental Benefits program in the event they might find themselves in a furlough situation and are not able to make payments through payroll deduction. This will cover 60 days initially and will be reviewed by Aflac on a monthly basis thereafter. 

This will keep coverage in place in the near term. Be assured that Bill Loweth and I will remain in constant communication on this and keep you up to date. Please remember that there is so much about the Coronavirus situation that we are just beginning to understand. Beyond this first 60 days, Aflac will, at a minimum, give those no longer on payroll deduction an opportunity to continue coverage on a direct pay basis, or to suspend coverage with the right to re-activate it at a later time with the exact same benefits, guarantees and costs. 

Fraternally,

 
Ken Meidinger
International Representative Airline Division
UAL Benefits Coordinator

Mechanics' Dispatch -- March 16, 2020

Special Update

March 16, 2020

Brothers and Sisters,

Last evening, (March 15th)  the company held a conference call with leaders of each union. The outlook has degraded considerably over the last couple of days and looks to continue to get worse for months to come. 

The company laid out their plan for officer and management compensation and asked that we all share in helping the company through this unprecedented rough period. However, many of us have been through tough times in the airline industry. The nature of the industry has always been cyclical. Recession, terrorist attacks and disease are always waiting around the corner. 

At this time, to even enter discussions designed to ensure the company's survival, there must be commitments made that any sacrifice will be repaid when this pandemic passes. Until there are such commitments, we are not prepared to discuss amendments to the collective bargaining agreement.  

In Solidarity,

Vincent Graziano
Local 210, Business Agent
IBT National Coordinator, Airline Division

Mechanics Dispatch - Special - March 13, 2020

Special Update
March 13, 2020

Brothers and Sisters,

Today after discussions with the company, I was able to achieve an agreement that no one affected by COVID-19 virus will be disciplined for using their sick leave. In addition, that company will also work with you if you are the sole caregiver as a result of a school closure due to the COVID-19 virus. 

If you are taking time to quarantine or recover and discipline is issued, reach out to your Stewards or Business Agents and we will hold the company to their agreement. 

Please use common sense and don't come to work with flu like symptoms. 

Vincent Graziano
Local 210, Business Agent
IBT National Coordinator, Airline Division

Mechanics Dispatch - Special Update - March 12, 2020

Special Update
March 12, 2020

Brothers and Sisters,

Yesterday the Airline Division leadership met with Oscar Munoz and his team in Washington D.C. to discuss the ongoing crisis surrounding the COVID-19 pandemic. To say the situation is dire is an understatement. With that said, the company is doing everything in its power to avoid layoffs.

To help understand the economic situation, the company held an investor call on Tuesday, which was attended by the Airline Division. The company believes a worst case projection is for a 70% reduction in revenue over a two-month period that would gradually decrease to a 20% reduction by December. For those that have been through other industry crises there is at least some good news. The company starts with a healthy balance sheet, and they are making decisions quickly to end discretionary spending.  

During the meeting with Oscar there was no discussion regarding relief from the CBA. The only thing requested was ideas for how to weather the storm. We brought forward the idea to temporarily bring outsourced work back in house to keep the membership busy with work that would need to be accomplished regardless of a reduced schedule. In addition, we are still trying to work with the Company to amend their Company offered Leave of absence so it reflects the Collective Bargaining Agreement. Let me reiterate, the Airline Division did not participate in the construction of the leave and will continue to ensure that the company institutes leaves of this nature in accordance with the agreement. 

As the meeting was wrapped there was a joint commitment to discuss additional ideas to help keep our members employed.

Last night, after our meeting with Oscar, the Administration took the extraordinary measure of shutting down travel to Europe for thirty days. This action will most likely impact the company's broader decisions regarding spending and employment. 

As with other crises in the past, no one can predict how long the coronavirus will impact travel demand, but the chances of the virus tipping our economy into a longer-term recession are much greater now. The industry and the economy will recover from this event, but it will take time.

To end on a better note, while we don't know the duration of this crisis, all airlines are projecting that recovery will take place sometime in 2021 meaning it will eventually subside and there will be a return to normal. For now, take the precautions laid out by the CDC and keep yourself safe. 

We will continue to meet with the Company to develop solutions to mitigate any impact on our members. This is an unprecedented crisis for our industry and we will update you as this situation unfolds.

Vincent Graziano
Local 210, Business Agent
IBT National Coordinator, Airline Division