Message Font: Serif | Sans-Serif
No. of Recommendations: 2
There are a lot of issues that the labor groups at UAL are stewing over concerning this acquisition. Financially, the pilots and mechanics feel that they were sold out because of the concessions they gave up on their last contracts which enabled UAL to stockpile cash and increase earnings over the life of the ESOP. Now the money they gave back to UAL is going to be used to buy a carrier that will, by Stephen Wolf's own admission, be bankrupt in a few years if someone doesn't buy them. That means that all of USAir's pilots and mechanics will be integrated into UAL's seniority lists, and, in the case of the pilots at least, most will come out very senior and displace a lot of UAL employees. Pretty nice payback for giving the company a break with a concessionary contract, wouldn't you say? Many at UAL feel that they don't need to buy USAir to attain substantial growth and that the 4+ billion could be better used to grow the company from within and thus avoid an enormous amount of merger costs (one example: all 6,000 USAir pilots will have to be retrained on United's operating procedures before the two companies can become fully integrated) and subsequent internal strife (can you imagine going to work every day and seeing a guy sitting next to you that you'd like to kill because he displaced you by a few thousand seniority numbers?) Are some of these arguments valid? I think so. Are these issues emotionally charged? You bet. The pilots and mechanics contributed greatly (fully?) to this summer's dismal performance at UAL and that was over a contract that will last, what? four years? It will take over 20 years for the last USAir pilot and longer for the last USAir mechanic to retire from United. Labor troubles? I dare say we have yet to even see the tip of this iceberg.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.