Not-so-United: Airline merger turns ugly

[marmar]

(Bloomberg) United Continental Holdings Inc. (UAL) is struggling to unify two union workforces more than a year after the $3.47 billion all-stock combination that created the world’s largest airline.

Chief Executive Officer Jeff Smisek accused some pilot union leaders yesterday of “shameful” complaints about flight safety, two days after the group sent a 105-page letter to Congress saying that a lack of training on new procedures was “potentially dangerous.”

The exchange spotlighted labor tensions at the carrier as Smisek stitches together predecessor carriers United Airlines and Continental Airlines. Reaping the full $1.2 billion in promised merger savings and new revenue won’t happen until all unions combine and have common work rules and pay scales, said Gary Chaison, a Clark University labor professor.

“It’s a black eye on the merger,” Chaison said by phone from Worcester, Massachusetts. “Labor issues are often the most contentious part of a merger, and this might make some people wonder whether it’s a priority for management or not. It’s also more uncertainty for the investment community.” ............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-11-18/united-labor-tension-damps-promise-of-1-2-billion-merger-gain.html

[rfranklin]

1. But the golden parachutes are safely stored in the executive suite...

Merger pays off for United, Continental chiefs


Smisek, Tilton rewarded following airline deal


April 22, 2011|By Julie Johnsson, Tribune Reporter


Airline CEO Jeff Smisek began 2010 with a vow not to receive a salary until Continental Airlines turned a profit and ended the year with a pay raise and $4.4 million in total compensation after pulling off a merger with United Airlines.

Smisek, who is CEO of the merged carrier's parent company, United Continental Holdings Inc., received a salary of $791,250 and $3.6 million in other incentive pay. Directors determined that Continental would have been profitable for the year but also bumped up Smisek's base pay after the Oct. 1 merger to $975,000, according to a proxy statement filed Friday with the Securities and Exchange Commission.
http://articles.chicagotribune.com/2011-04-22/business/ct-biz-0423-united-pay-20110422_1_merger-united-ceo-united-executives

[Scuba]

3. +1

[trof]

5. "The merger of two pilot groups is 'successful' when...

both sides are equally pissed off about the result."

That's what a pilot for one airline that merged with another years ago answered when I asked him how the merger of the seniority lists went.
:rofl:

[Turbineguy]

2. At least the planes

are getting painted.

[RC]

4. Important things first.

Paint jobs to deflect attention from the golden parasites parachutes.