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November 25, 2020
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SouthWest Air Survey
Updated On: Oct 23, 2020

Update 10/22/20 Survey Info.

October 22, 2020

Brothers and Sisters,

In our last communication we advised you that the Company is seeking a 10% reduction in costs from you to avoid furloughs in 2021. We have put together a brief survey with just a few very specific questions as to whether or not you are willing to entertain concessions for the year of 2021 and if so which areas are you willing to give them.

Prior to taking the survey we want you to have the following facts.  Through volunteering for VSP and EXTO programs the Material Specialists and Sim Techs have already provided hundreds of thousands of net savings to SWA for 2020-2021. The savings from the EXTO and VSP programs were designed as an alternative means to meet the original 10% concessions in Gary’s Ask from April.  If these savings are combined with the additional $ millions the Company is seeking in the latest 10% pay cut it would mean that your concessions would be saving SWA well above their current 10% pay cut proposal.  

You should also be aware that Southwest Airlines is currently spending more than it takes in and has a reported they expect a cash burn of around $10 million a day for the remainder of the year.  That is a lot of money, but it is down 70% from the $17 million a day they were burning in August. The company reported cash balances of $14.6 billion, which is almost 5 times more than their normal cash balance and is predicting that they will finish the year with approximately $13 billion in cash to weather this storm. On the third quarter earnings call, SWA reported it had access to another $1.0 billion revolver and $15 billion in unencumbered assets (mostly aircraft) to provide backup for any further borrowing they may need. The current cash balance provides four years of cash to continue operations at current cash burn level.  Bottom line, Southwest is in no danger of being unable to survive this crisis with or without our concessions.  The amount Materials Specialists and Sim Techs are being asked to provide to SWA to cut costs would amount to less than 1% of its current cash burn, hardly more than a token gesture and not enough to move the needle.  They do not “need” the savings from their proposed 10% pay cut to survive or prosper.  SWA is opening new stations and is poised for growth, and to “take a bigger share of the market than we had before” as Gary Kelly said.

So, as we move to the next step you must consider if giving SWA 10% of your pay, or perhaps “equivalent value” for other concessions, for nothing more than a token financial gesture to save jobs is worth it?  Importantly, SWA has not told us how many of your jobs are at stake if we are unable to meet their new 10% concession target, so we don’t really know exactly what we are buying with these concessions, other than “no furloughs”.  There may also be alternatives to the pay cut that we could propose to meet the value of the 10% cost concession they are seeking to prevent an unknown level of job loss.

Given this situation we want to know what you want to do.  SWA’s Executive Officers have all committed to salary cuts, but you should also know that the bulk of their income does not come from salary but rather “Other Instruments” such as $ millions in stock options. They will not feel the bite like you do.

The Company has indicated that there will be furloughs in 2021 if you do not give the 10% they are asking for. That is a distinct possibility, but what is to stop the company from coming back to you and asking for more in 2021 or even furloughing regardless of their negotiated terms if the industry does not recover.

The Survey will be posted for 7 days starting on 10/23/20 and ending at COB on 10/29/20. We urge each and every one of you to participate so that your representatives have a clear indication on your preferences in this critical matter.

You can take the Survey at https://nam04.safelinks.protection.outlook.com/?  or on your Local Union website.

Remember, no concessions can be imposed until they are voted on by you, the members.

Lastly, if the government approves an additional Payroll Support Program for the Airlines we will NOT move forward with any concessionary discussions.

Fraternally,

Chris Moore                                         Bob Clever                               Paul Alves

International Representative                President                                  International Representative

Airline Division                                     Teamsters Local 19                  Airline Division


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  Current Campaigns  
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