Year: 2010

Home>News>2010

MINNEAPOLIS — The CEOs of United Airlines and US Airways have both been up front about their desire to merge with another airline. Now it appears they’re talking to each other, the Associated Press reports.

The two are in talks about a combination that would create the nation’s second-biggest airline, a person with knowledge of the situation told The Associated Press on Wednesday. The person insisted on anonymity because of the sensitive nature of the talks, which the person said appear to be getting more serious.

This person said a deal would be modeled on the Delta-Northwest combination, which was a stock swap without a cash component.

United Chairman and CEO Glenn Tilton and US Airways Chairman and CEO Doug Parker were both involved when their companies talked about combining in 2008. They walked away then citing high fuel prices, but didn’t rule out a future deal. That same year, Continental Airlines Inc. rejected United’s attempt at a combination.

“We don’t comment on rumors or speculation,” United spokeswoman Jean Medina said Wednesday. “We’ve been consistent on our position on consolidation generally for several years, and that position is well known.”

US Airways spokesman Jim Olson also said the airline doesn’t comment on rumors.

Integrating their unionized work forces would be one of the most difficult tasks if United Airlines and US Airways got together. The person who spoke to AP said the companies have a plan for dealing with that issue.

US Airways, which is based in Tempe, Ariz., still runs separate pilot and flight attendant groups after it was bought in 2005 by America West. And its pilots formed their own union after leaving the Air Line Pilots Association, the union that represents United aviators.

Executives at Delta and Northwest put their deal on hold in early 2008 so their pilots could work out an agreement on combining their ranks.

Pilots at US Airways have not been involved in any talks with United, said James Ray, a spokesman for the US Airline Pilots Association.

“We’ll support anything that would be good for our pilot group,” he said.

A spokesman for the United branch of the Air Line Pilots Association did not immediately return a phone message seeking comment.

“Mergers in the airline business are notoriously difficult,” said Doug Abbey, an independent airline consultant in Washington. He added, though, that Delta’s purchase of Northwest has gone well.

“The discussions certainly wouldn’t surprise me,” he said. “This is a combination that has been embraced as plausible by a lot of people.”

Based on 2009 traffic, a combined United-US Airways would be nearly as big as Delta Air Lines Inc., which became the world’s largest airline after buying Northwest. It is unclear which name would survive, where the combined company would be based, or who would run it.

Like Northwest before it, one of United’s main attractions is its Pacific routes, which it bought from Pan-Am in 1985.

Both airlines have been shrinking to cope with the recession. United cut capacity 7.4 percent last year, while US Airways shrank 4.6 percent. US Airways is cutting most flying that doesn’t pass through either Washington or its hubs in Charlotte, N.C., Philadelphia, or Phoenix.

US Airways lost $205 million in 2009, and revenue fell almost 14 percent to $10.46 billion. UAL lost $651 million, while revenue fell 19.1 percent to $16.34 billion.

Shares US Airways rose $1.39, or 20.4 percent, to $8.21 in after-hours trading Wednesday. United parent UAL Corp. fell 18 cents to $18.77.

(The preceding report by Joshua Freed was distributed April 8, 2010, by the Associated Press.)

The National Railway Labor Conference (NRLC), in an April 1 letter to the Sheet Metal Workers International Association and its General President Mike Sullivan, has recognized the requirements of status quo under the Railway Labor Act and said all carriers will continue remitting UTU member dues to the UTU.

“The deduction and remittance of dues are governed by the requirements of Section 2, Eleventh of the Railway Labor Act [which] requires railroads to deduct and remit dues in accordance with union security provisions contained in collective bargaining agreements and written authorizations from individual employees authorizing the deduction of dues from their pay,” said the NRLC.

In addition, said the NRLC, the carriers recognize that there is additional merger-related litigation pending in the U.S. District Court for the District of Columbia.

By Retired UTU GS&T Dan Johnson

In the February issue of UTU News, it was explained that the Railway Labor Act (RLA) is purposely designed to encourage both sides to reach a mutually acceptable solution that keeps the trains running.

Railroad contracts have no expiration date, but do contain a moratorium prohibiting either side from seeking amendments until an agreed upon date when the contract may be reopened for amendment.

The current national rail contract between the UTU and most of the nation’s major railroads was reopened for amendment on Jan. 1. There is no time limit during which the negotiating process must be completed. While some contract amendments have been negotiated within a few months, some negotiations have stretched on for years.

The RLA defines numerous steps rail labor and management must take in negotiating amendments to contracts covering wages, rules and working conditions. These steps include intervention by the National Mediation Board (NMB), whose experts seek to guide the parties toward a productive outcome.

While the NMB cannot force an agreement on either party, it has the authority to keep the negotiators at the bargaining table, indefinitely, plus other numerous tools to help cool tempers during stressful periods.

In January 2008, within 30 days of taking office, President Futhey and his negotiating team reached a tentative agreement with the carriers that was overwhelmingly ratified by the membership. This tentative agreement concluded several years of hostile bargaining between the previous administration and the railroads.

The moratorium on that agreement expired Dec. 31, 2009; prior to this date, the UTU and carriers exchanged desired amendments. A list of those desired amendments — as well as updates on contract negotiations — may be viewed on the UTU Web site by clicking on the “National Railroad Contract” link in the lower right-hand corner of the home page.

The current UTU negotiating team, led by President Futhey, has had initial meetings with the carriers, and those meetings will continue periodically to explain each side’s desired amendments, exchange data supporting each side’s position, and move both sides closer to a tentative agreement.

President Futhey subscribes to a progressive negotiating process known as “interest-based bargaining,” by which each side explains to the other why they are seeking each contract amendment — in fact, joint problem solving.

By the sides’ exploring each other’s problems, and mutually suggesting a range of trade-offs, negotiations typically jell into mutually acceptable solutions. This is in contrast to each side simply announcing demands and contentiously seeking surrender of the other side — a process that, more often than not, results in Congress forcing both sides to a settlement neither fully desires.

If the parties, notwithstanding the efforts of the NMB, cannot reach a voluntary settlement, the RLA provides for binding arbitration (which must be accepted by both parties) or investigation by a White House appointed presidential emergency board (PEB).

If the recommendations of the PEB do not lead to a settlement, the RLA has run its course and the carriers may unilaterally impose their desired contractual changes and/or labor can strike. Because of economic and national security concerns, Congress has rarely allowed a railroad work stoppage to continue more than a few days. Typically, this translates into Congress imposing, through a back-to-work order that serves as an amended contract, the recommendations of the PEB.

First and foremost, the RLA is a law designed to avoid railroad strikes and lockouts and the resultant interruption of interstate commerce.

With that said, and with the parties at the negotiating table since early January, what is next? That will be the subject of next month’s column.

 

(Dan Johnson was UTU International GS&T from 2001 until his retirement in 2007. He hired on as a Southern Pacific trainman, Tucson Division, in 1966.

 

He was elected vice local chairperson, local chairperson and legislative representative for Local 807, and was Arizona State Legislative Board chairperson from 1975-1983. He was vice general chairperson and general chairperson for Southern Pacific/Union Pacific Western Lines from 1981-1997; and a UTU International vice president from 1997 until his election as GS&T in 2001.

Brother Johnson earned an undergraduate degree in government and history from the University of Arizona, where he also did graduate studies.)

By UTU International President Mike Futhey

I agree with President Obama regarding health care legislation: “Let us find a way to come together and finish the job for the American people.”

We, as a nation, Democrats and Republicans, conservatives and liberals — patriots all — must find a way to make health care insurance easier to obtain, more difficult to lose, and more affordable for all Americans.

Health care insurance — the lack of it for tens of millions of Americans; the cost of it for the rest of us — is a crucial component of our economy, and we can’t strengthen the American economy until we fix our health care problem.

The problem is not a shortage of health care in America. The problem is the cost of health care insurance to those who have it; and the cost of delivering health care to those without health care insurance — a cost increasingly borne by those with health care insurance.

You see, those without health care insurance typically delay seeking routine medical care until a health crisis occurs, which dramatically increases the cost of their treatment.

Those costs do not disappear. The staggering hospital and other medical costs incurred by the uninsured — when they do fall ill — is beyond their ability to pay. Those costs are thus shifted to those with health care insurance because, in the end, hospitals, physicians and drug manufacturers must bill someone to stay in business.

While it is near impossible to determine precisely, we know that a meaningful portion of the health care insurance costs of our employers include the costs of treating the uninsured.

Medical-cost inflation also is a big factor in the soaring costs of health care insurance. Since 2004, the cost to major railroads of providing employee health care insurance has soared by 41 percent, to $15,671 per employee annually (of which the employee pays $2,400, and the carrier the remaining $13,271).

Increasingly, carriers are attempting to force a greater share of these health care insurance costs on workers through increased cost sharing. And make no mistake: the carrier does not pay the remainder of the premium as a goodwill gesture. More and more, available wage increases must be sacrificed at the bargaining table because of the soaring cost of health care insurance.

Many smaller employers are actually eliminating company-paid group health care insurance, creating thousands more Americans daily without health care insurance and whose health care costs eventually will fall on those with health care insurance.

Members of Congress must put aside their political differences and stop trading evening-news sound bites.

Only when we extend health care insurance to the tens of millions of Americans now lacking it, prohibit the denial of coverage to those already sick, help low-income families pay for health care insurance, and take meaningful steps to bring health care inflation under control, will we, as a nation, have truly looked into our individual souls and done right by each other.

Employers and employees covered by the Railroad Retirement Act pay higher retirement taxes than those covered by the Social Security Act, so that railroad retirement benefits remain higher than Social Security benefits, especially for career employees.

The following questions and answers show the differences in railroad retirement and social security benefits payable at the close of the fiscal year ending September 30, 2009. They also show the differences in age requirements and payroll taxes under the two systems.

1. How do the average monthly railroad retirement and social security benefits paid to retired employees and spouses compare?

The average age annuity being paid by the Railroad Retirement Board (RRB) at the end of fiscal year 2009 to career rail employees was $2,690 a month, and for all retired rail employees the average was $2,125. The average age retirement benefit being paid under social security was over $1,160 a month. Spouse benefits averaged $795 a month under railroad retirement compared to $555 under social security.

The Railroad Retirement Act also provides supplemental railroad retirement annuities of between $23 and $43 a month, which are payable to employees who retire directly from the rail industry with 25 or more years of service.

2. Are the benefits awarded to recent retirees generally greater than the benefits payable to those who retired years ago?

Yes, because recent awards are based on higher average earnings. Age annuities awarded to career railroad employees retiring at the end of fiscal year 2009 averaged over $3,280 a month while monthly benefits awarded to workers retiring at full retirement age under social security averaged about $1,625. If spouse benefits are added, the combined benefits for the employee and spouse would approximate $4,550 under railroad retirement coverage, compared to $2,435 under social security. Adding a supplemental annuity to the railroad family’s benefit increases average total benefits for current career rail retirees to about $4,585 a month.

3. How much are the disability benefits currently awarded?

Disabled railroad workers retiring directly from the railroad industry at the end of fiscal year 2009 were awarded nearly $2,800 a month on the average while awards for disabled workers under social security averaged about $1,125.

While both the Railroad Retirement and Social Security Acts provide benefits to workers who are totally disabled for any regular work, the Railroad Retirement Act also provides disability benefits specifically for career employees who are disabled for work in their regular railroad occupation. Career employees may be eligible for such an occupational disability annuity at age 60 with 10 years of service, or at any age with 20 years of service.

4. Can railroaders receive benefits at earlier ages than workers under social security?

Railroad employees with 30 or more years of creditable service are eligible for regular annuities based on age and service the first full month they are age 60, and rail employees with less than 30 years of creditable service are eligible for regular annuities based on age and service the first full month they are age 62.

No early retirement reduction applies if a rail employee retires at age 60 or older with 30 years of service and his or her retirement is after 2001, or if the employee retired before 2002 at age 62 or older with 30 years of service.

Early retirement reductions are otherwise applied to annuities awarded before full retirement age — the age at which an employee can receive full benefits with no reduction for early retirement. This ranges from age 65 for those born before 1938 to age 67 for those born in 1960 or later, the same as under social security.

Under social security, a worker cannot begin receiving retirement benefits based on age until age 62, regardless of how long he or she worked, and social security retirement benefits are reduced for retirement prior to full retirement age regardless of years of coverage.

5. Does social security offer any benefits that are not available under railroad retirement?

Social security does pay certain types of benefits that are not available under railroad retirement. For example, social security provides children’s benefits when an employee is disabled, retired or deceased. Under current law, the Railroad Retirement Act only provides children’s benefits if the employee is deceased.

However, the Railroad Retirement Act includes a special minimum guaranty provision which ensures that railroad families will not receive less in monthly benefits than they would have if railroad earnings were covered by social security rather than railroad retirement laws. This guaranty is intended to cover situations in which one or more members of a family would otherwise be eligible for a type of social security benefit that is not provided under the Railroad Retirement Act. Therefore, if a retired rail employee has children who would otherwise be eligible for a benefit under social security, the employee’s annuity can be increased to reflect what social security would pay the family.

6. How much are monthly benefits for survivors under railroad retirement and social security?

Survivor benefits are generally higher if payable by the RRB rather than social security. At the end of fiscal year 2009, the average annuity being paid to all aged and disabled widow(er)s averaged $1,285 a month, compared to $1,100 under social security.

Benefits awarded by the RRB at the end of fiscal year 2009 to aged and disabled widow(er)s of railroaders averaged approximately $1,725 a month, compared to about $890 under social security.

The annuities being paid at the end of fiscal year 2009 to widowed mothers/fathers averaged $1,595 a month and children’s annuities averaged $935, compared to $840 and $745 a month for widowed mothers/fathers and children, respectively, under social security.

Those awarded at the end of fiscal year 2009 averaged $1,620 a month for widowed mothers/fathers and $1,240 a month for children under railroad retirement, compared to $820 and $750 for widowed mothers/fathers and children, respectively, under social security.

7. How do railroad retirement and social security lump-sum death benefit provisions differ?

Both the railroad retirement and social security systems provide a lump-sum death benefit. The railroad retirement lump-sum benefit is generally payable only if survivor annuities are not immediately due upon an employee’s death. The social security lump-sum benefit may be payable regardless of whether monthly benefits are also due. Both railroad retirement and social security provide a lump-sum benefit of $255. However, if a railroad employee completed 10 years of creditable railroad service before 1975, the average railroad retirement lump-sum benefit payable is $990. Also, if an employee had less than 10 years of service, but had at least 5 years of such service after 1995, he or she would have to have had an insured status under social security law (counting both railroad retirement and social security credits) in order for the $255 lump-sum benefit to be payable.

The social security lump sum is generally only payable to the widow(er) living with the employee at the time of death. Under railroad retirement, if the employee had 10 years of service before 1975, and was not survived by a living-with widow(er), the lump sum may be paid to the funeral home or the payer of the funeral expenses.

8. How do railroad retirement and social security payroll taxes compare?

Railroad retirement payroll taxes, like railroad retirement benefits, are calculated on a two-tier basis. Rail employees and employers pay tier I taxes at the same rate as social security taxes, 7.65 percent, consisting of 6.20 percent for retirement on e
arnings up to $106,800 in 2010 and 1.45 percent for Medicare hospital insurance on all earnings.

In addition, rail employees and employers both pay tier II taxes which are used to finance railroad retirement benefit payments over and above social security levels.

In 2010, the tier II tax rate on employees is 3.9 percent and on rail employers it is 12.1 percent on employee earnings up to $79,200.

9. How much are regular railroad retirement taxes for an employee earning $106,800 in 2010 compared to social security taxes?

The maximum amount of regular railroad retirement taxes that an employee earning $106,800 can pay in 2010 is $11,259, compared to $8,170.20 under social security. For railroad employers, the maximum annual regular retirement taxes on an employee earning $106,800 are $17,753.40 compared to $8,170.20 under social security. Employees earning over $106,800, and their employers, will pay more in retirement taxes than the above amounts because the Medicare hospital insurance tax of 1.45 percent is applied to all earnings.

Retired UTU member Tom Berry (Local 528, Chicago) has been endorsed by the Texas Democratic party to run for the U.S. House of Representatives in November, representing the Fifth Congressional District in Texas, which includes portions of Dallas.

It will be an uphill battle. His Republican opponent, four-term congressman Jeb Hensarling, won with 84 percent of the vote in 2008.

Berry is running on a platform in support of health care reform and in opposition to privatization of Social Security.

Berry retired from Union Pacific in 2006. He served five four-year terms (1971-1991) as Local 528 chairperson, and also served as UTU’s Illinois state legislative director.

To learn more about Berry and his campaign, click on the following link: http://www.TomBerryforCongress.com

March is National Colorectal Cancer Awareness Month, and here are some things you should know.
Colon cancer is usually found in people age 50 or older, and the risk of getting it increases with age.
If you are covered by private health insurance or Medicare, you can get colon screening tests to help find pre-cancerous polyps (growths in the colon) so they can be removed before they turn into cancer. Treatment works best when colon cancer is found early.
How often is testing covered by Medicare? Fecal occult blood test: once every 12 months; flexible sigmoidoscopy: once every 48 months; screening colonoscopy: once every 24 months (if you’re at high risk); once every 10 years, but not within 48 months of a screening sigmoidoscopy (if you’re not at high risk); Barium enema: your doctor can decide to use this test instead of a flexible sigmoidoscopy or colonoscopy. This test is covered every 24 months if you are at high risk for colorectal cancer and every 48 months if you aren’t at high risk. (Limitations also may apply to those with private health insurance.)
The above limits apply to people with Medicare age 50 and older, except there is no minimum age for having a screening colonoscopy.
What are your costs in the original Medicare plan? You pay nothing for the fecal occult blood test. For all other tests, you pay 20 percent of the Medicare-approved amount after the yearly Part B deductible. If the flexible sigmoidoscopy or colonoscopy is done in a hospital outpatient department, you pay 25 percent of the Medicare-approved amount after the yearly Part B deductible.
What factors increase risk for colorectal cancer? Risk for colon cancer increases if: You have had colon cancer before, even if it has been completely removed; you have a close relative, such as a sister or brother, parent, or child, who had colorectal polyps or colon cancer; you have a history of polyps; you have inflammatory bowel disease (like ulcerative colitis or Crohn’s disease).
Those with private health insurance may also be eligible for colon-cancer screening benefits; consult your health-care plan for benefits and limitations.
Risk for colon cancer increases with age. It is important to continue with screening, even if you were screened before you entered Medicare.
To learn more, read the column on colon cancer by the UTU’s medical consultant, Dr. Norman K. Brown, by clicking on this link:
https://www.smart-union.org/news/colon-cancer-dont-be-a-victim-6/

March is National Colorectal Cancer Awareness Month, and here are some things you should know.
Colon cancer is usually found in people age 50 or older, and the risk of getting it increases with age.

If you are covered by private health insurance or Medicare, you can get colon screening tests to help find pre-cancerous polyps (growths in the colon) so they can be removed before they turn into cancer. Treatment works best when colon cancer is found early.

How often is testing covered by Medicare? Fecal occult blood test: once every 12 months; flexible sigmoidoscopy: once every 48 months; screening colonoscopy: once every 24 months (if you’re at high risk); once every 10 years, but not within 48 months of a screening sigmoidoscopy (if you’re not at high risk); Barium enema: your doctor can decide to use this test instead of a flexible sigmoidoscopy or colonoscopy. This test is covered every 24 months if you are at high risk for colorectal cancer and every 48 months if you aren’t at high risk. (Limitations also may apply to those with private health insurance.)

The above limits apply to people with Medicare age 50 and older, except there is no minimum age for having a screening colonoscopy.

What are your costs in the original Medicare plan? You pay nothing for the fecal occult blood test. For all other tests, you pay 20 percent of the Medicare-approved amount after the yearly Part B deductible. If the flexible sigmoidoscopy or colonoscopy is done in a hospital outpatient department, you pay 25 percent of the Medicare-approved amount after the yearly Part B deductible.

What factors increase risk for colorectal cancer? Risk for colon cancer increases if: You have had colon cancer before, even if it has been completely removed; you have a close relative, such as a sister or brother, parent, or child, who had colorectal polyps or colon cancer; you have a history of polyps; you have inflammatory bowel disease (like ulcerative colitis or Crohn’s disease).

Those with private health insurance may also be eligible for colon-cancer screening benefits; consult your health-care plan for benefits and limitations.

Risk for colon cancer increases with age. It is important to continue with screening, even if you were screened before you entered Medicare.

To learn more, read the column on colon cancer by the UTU’s medical consultant, Dr. Norman K. Brown, by clicking on this link:

https://www.smart-union.org/news/colon-cancer-dont-be-a-victim-6/

By Retired UTU GS&T Dan Johnson

We frequently hear from frustrated members, “Why don’t we simply go on strike, shut the railroad down, and be done with it?”

I, too, have shared these feelings witnessing excessive discipline, outrageous demands of arrogant managers, and carrier negotiators focusing only on their year-end bonus. But the fact is, it’s against the law to simply “shut ‘em down.”

Before labor or management may engage in strikes or lockouts, each must satisfy numerous steps spelled out by the Railway Labor Act (RLA). In most disputes – defined as differences over application or interpretation of contracts – the RLA requires final and binding arbitration.

In the few disputes that can lead to a strike or lockout — involving collective bargaining over contract amendments affecting wages, benefits and working conditions — the Supreme Court held that the RLA purposely creates “interminable” delay designed to encourage both sides to reach a mutually-acceptable solution and keep the trains running.

Among the lengthy steps is open-ended mediation by the National Mediation Board, and recommendations for settlement by a White House appointed presidential emergency board (PEB).

Railroads are deemed so essential to national defense and a healthy economy that even in the few instances where all intermediate steps fail, and a strike or lockout is permitted, Congress usually inserts itself and passes a back-to-work law imposing settlement demands generally mirroring PEB recommendations.

We, in rail labor, have learned from bitter experience that our membership is better served by a voluntary settlement — even if we don’t get all we want — than having a third party, with no real-world knowledge of our industry, cram a settlement down our throats.

Finally, if we ignore the law and “shut ‘em down” anyway, we face fines and civil judgments that could bankrupt the union and result in jail terms for those involved in the shutdown.

(Dan Johnson served as UTU GS&T from 2001 until his retirement in 2007. He hired on as a Southern Pacific trainman, Tucson Division, in 1966. He held elective positions of vice local chairperson, local chairperson and legislative representative for Local 807, Tucson, and was Arizona State Legislative Board chairperson from 1975-1983.

Brother Johnson was vice general chairperson and general chairperson for Southern Pacific/Union Pacific Western Lines from 1981-1997; and an International vice president from 1997 to his election as GS&T in 2001.

He earned an undergraduate degree in government and history from the University of Arizona in 1969, and did graduate studies there in 1969 and 1970.)

By Retired UTU GS&T Dan Johnson

We frequently hear from frustrated members, “Why don’t we simply go on strike, shut the railroad down, and be done with it?”

I, too, have shared these feelings witnessing excessive discipline, outrageous demands of arrogant managers, and carrier negotiators focusing only on their year-end bonus. But the fact is, it’s against the law to simply “shut ‘em down.”

Before labor or management may engage in strikes or lockouts, each must satisfy numerous steps spelled out by the Railway Labor Act (RLA). In most disputes – defined as differences over application or interpretation of contracts – the RLA requires final and binding arbitration.

In the few disputes that can lead to a strike or lockout — involving collective bargaining over contract amendments affecting wages, benefits and working conditions — the Supreme Court held that the RLA purposely creates “interminable” delay designed to encourage both sides to reach a mutually-acceptable solution and keep the trains running.

Among the lengthy steps is open-ended mediation by the National Mediation Board, and recommendations for settlement by a White House appointed presidential emergency board (PEB).

Railroads are deemed so essential to national defense and a healthy economy that even in the few instances where all intermediate steps fail, and a strike or lockout is permitted, Congress usually inserts itself and passes a back-to-work law imposing settlement demands generally mirroring PEB recommendations.

We, in rail labor, have learned from bitter experience that our membership is better served by a voluntary settlement — even if we don’t get all we want — than having a third party, with no real-world knowledge of our industry, cram a settlement down our throats.

Finally, if we ignore the law and “shut ‘em down” anyway, we face fines and civil judgments that could bankrupt the union and result in jail terms for those involved in the shutdown.

(Dan Johnson served as UTU GS&T from 2001 until his retirement in 2007. He hired on as a Southern Pacific trainman, Tucson Division, in 1966. He held elective positions of vice local chairperson, local chairperson and legislative representative for Local 807, Tucson, and was Arizona State Legislative Board chairperson from 1975-1983.

Brother Johnson was vice general chairperson and general chairperson for Southern Pacific/Union Pacific Western Lines from 1981-1997; and an International vice president from 1997 to his election as GS&T in 2001.

He earned an undergraduate degree in government and history from the University of Arizona in 1969, and did graduate studies there in 1969 and 1970.)